Home Business Amazon Scraps Deal to Buy Maker of Roomba Amid Regulatory Scrutiny

Amazon Scraps Deal to Buy Maker of Roomba Amid Regulatory Scrutiny

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Amazon Scraps Deal to Buy Maker of Roomba Amid Regulatory Scrutiny

Amazon said on Monday that it was abandoning plans to buy iRobot, the maker of the self-driving Roomba vacuum, after regulators raised concerns the deal would hurt competition.

The announcement is a rare admission of defeat by Amazon, which has in recent years acquired an eclectic mix of companies such as Whole Foods and MGM Studios, and is a sign of how the world’s largest tech companies are being forced to adjust their business practices, products and policies as a result of stiffening regulatory scrutiny globally, particularly in the European Union.

In November, E.U. antitrust regulators warned Amazon that they might try to block the deal because it could restrict competition in the market for robot vacuum cleaners. The Federal Trade Commission was also scrutinizing the deal.

Amazon, which will pay iRobot a $94 million termination fee, said in a statement that “disproportionate regulatory hurdles” caused it to step away from the deal, which was first announced in 2022. IRobot’s products, which also include robotic mops and air purifiers, were to join a growing list of connected home products made by Amazon, including Ring home security systems and Echo smart speakers.

Amazon said that rather than restrict competition, the deal would have given iRobot more resources to compete with other robotics companies.

“This outcome will deny consumers faster innovation and more competitive prices, which we’re confident would have made their lives easier and more enjoyable,” David Zapolsky, Amazon senior vice president and general counsel, said in the statement.

Amazon is not the only company facing hurdles completing acquisitions. In December, Adobe, the maker of Photoshop and Illustrator, scrapped a $20 billion takeover of Figma, a maker of design collaboration tools, after it was questioned by regulators in the United States, the European Union and Britain.

In the European Union, oversight of the tech sector is expected to intensify in the coming months as a new law, the Digital Markets Act, takes full effect with the aim of increasing competition in the digital economy. Last week, Apple announced a slew of changes to comply with the law, including allowing customers to use alternatives to the App Store for the first time.

IRobot, a publicly traded company grappling with declining sales and mounting losses, must regroup without the financial backing of Amazon. The company’s stock price has fallen more than 60 percent in the past month as the fate of the deal with Amazon was thrown into doubt.

On Monday, iRobot said it would cut approximately 350 jobs, or about 30 percent of its work force, as well as reshuffle its management ranks.

“The termination of the agreement with Amazon is disappointing, but iRobot now turns toward the future with a focus and commitment to continue building thoughtful robots and intelligent home innovations,” Colin Angle, the company’s founder, who is stepping down as chief executive, said in a statement.

Glen Weinstein, iRobot’s executive vice president and chief legal officer, was appointed interim chief executive.

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