Warren, Jones, Lawmakers Call on FTC to Oppose Amazon’s Proposed $1.65 Billion Acquisition of iRobot
Lawmakers Raise Concerns About Competition in Home Robotics Market, Amazon’s History of Anticompetitive Practices, and Threats to Consumer Privacy
Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.) and Representatives Mondaire Jones (D-N.Y.), Katie Porter (D-Calif.), Mark Pocan (D-Wisc.), Pramila Jayapal (D-Wash.), and Jesús “Chuy” García (D-Ill.) sent a letter to the Federal Trade Commission (FTC) calling on the agency to oppose Amazon’s proposed $1.65 billion acquisition of iRobot, raising concerns about Amazon’s anticompetitive practices that put consumers and their privacy at risk.
“I have serious concerns about the Amazon-iRobot deal – dominant companies like Amazon shouldn’t be allowed to just buy their way out of competing,” said Senator Warren. “The FTC should oppose this proposed merger to protect competition, lower consumer prices, and rein in Amazon’s well-documented anticompetitive activities.”
In September, the FTC officially began a review of Amazon’s proposed $1.65 billion acquisition of iRobot, which “dominates” the smart vacuum market with 75% market share by revenue. Amazon had previously attempted to compete with iRobot’s flagship Roomba vacuum with its own products, which received a limited rollout and lackluster responses, and these products were put on indefinite hold in 2020.
“iRobot is a powerful market incumbent, and Amazon, given its vast resources, history of producing smart vacuums… and powerful platform, is an extraordinarily significant ‘potential entrant’ into the market: Amazon’s ability to acquire iRobot would cause substantially less competition,” wrote the lawmakers.
Amazon’s strategy of leveraging massive market share and access to capital to buy or suppress popular products, coined “Cope-Acquire-Kill,” is a long-held pattern for the company:
- In 2017 and 2018, Amazon acquired Blink and Ring, producers of video security doorbells that account for 40% of the video doorbells in the U.S. – and by 2021, Amazon Ring sold as many units as its four closest competitors combined.
- In 2012, Amazon acquired Kiva Systems, an industrial bot builder, stopped selling Kiva devices to other manufacturers, and instead used them exclusively in their warehouse – leveraging its monopoly power to make itself a leader in the warehouse and fulfillment robotics space.
- Amazon’s anticompetitive practices have also included the use of data from third-party sellers on its platform to launch its own competing products, and “exploiting its vast trove of internal data to promote its own merchandise at the expense of other sellers.”
The lawmakers also expressed concerns about Amazon’s data privacy policies and impacts on consumer privacy if it acquires iRobot. Amazon has failed to protect consumers and consumer privacy – its Alexa voice assistant listens and records to consumers without consent, and it partners with over 600 law enforcement agencies through its Ring video doorbells. Since 2017, iRobot has moved into data collection, using mapping technology to improve its products and appeal to Big Tech companies. “Amazon’s acquisition of iRobot would give the company access to the inside of homes through Roomba’s mapping technology, building on the access it bought with the Ring and Blink purchases in 2017 and 2018 and effectively giving Amazon ‘eyes and ears’ inside the home – the stated goal of the company since at least 2017,” continued the lawmakers.
Given Amazon’s pattern of anticompetitive behavior, failure to protect consumers and their privacy, and antitrust and consumer-protection concerns if it acquires iRobot, the lawmakers are calling on the FTC to use its authorities, consistent with Section 7 of the Clayton Act, to oppose the Amazon-iRobot transaction.
As a champion for consumers and fair markets, Senator Warren has urged regulators to use every tool available to combat market concentration, monopolies, and anticompetitive practices across every sector of the economy:
- In September 2022, Senator Warren sent a letter to Secretary of Transportation Pete Buttigieg, urging the Department of Transportation to use its full statutory authority to address consolidation in the airline industry and expressing serious concerns about the proposed merger between JetBlue and Spirit Airlines.
- In June 2022, as the country faced an infant formula crisis, Senators Warren Cory Booker (D-N.J.), and Bernie Sanders (I-Vt.) and U.S. Representative Katie Porter (D-Calif.) sent a letter to Jonathan Kanter, Assistant Attorney General for the Department of Justice Antitrust Division, expressing skepticism regarding a bid from a private equity firm to acquire the Enfamil infant formula manufacturing arm of Reckitt Benckiser Group and how such a transaction, amid the nation’s ongoing infant formula shortage, could harm competition or prolong this crisis.
- In May 2022, Senators Warren and Mike Rounds (R-S.D.) introduced a bipartisan joint resolution that would direct the FTC to report to Congress within one year on the extent of anti-competitive practices and violations of antitrust law in the beef-packing industry, including price-fixing, anti-competitive acquisitions, dominance of supply chains, and monopolization.
- On March 16, 2022, Senator Warren introduced the Prohibiting Anticompetitive Mergers Act to help stomp out rampant industry consolidation that allows companies to raise consumer prices and mistreat workers. The bill would ban the biggest, most anticompetitive mergers and give the Department of Justice and FTC the teeth to reject deals in the first instance without court orders and to break up harmful mergers.
- In March 2022, Senator Warren and Representative Jones, along with Senators Ben Ray Luján (D-N.M.) and Bernie Sanders (I-Vt.), and Representatives Rashida Tlaib (D-Mich.), Porter, Jan Schakowsky (D-Ill.), and Alexandria Ocasio-Cortez (D-N.Y.) sent a letter to Jonathan Kanter, Assistant Attorney General for the Antitrust Division and Transportation Secretary Pete Buttigieg, expressing concerns about Frontier Airline’s proposed acquisition of Spirit Airlines.
- In February 2022, Senator Warren and Representative Jones led their colleagues to slam the proposed merger between Sanderson Farms, the third largest poultry processor, and Wayne Farms, the sixth largest poultry processor, and called on the Department of Justice to thoroughly review the deal and step in to prevent harm to American farmers and consumers.
- In February 2022, at a hearing, Senator Warren called out corporations for abusing their market power to raise consumer prices and boost profits.
- In February 2022, Senator Warren requested the Department of Justice to take aggressive action against corporations violating antitrust laws to hike prices for consumers.
- In January 2022, Senator Warren questioned Federal Reserve nominee Lael Brainard about market concentration and price gouging driving inflation.
- At a hearing in January 2022, Senator Warren pressed Fed Chair Jerome Powell on the role of corporate concentration in driving up prices for consumers during his renomination hearing to be Chair of the Board of Governors of the Federal Reserve System.
- In December 2021, Senator Warren and Representatives Joaquin Castro (D-Texas), David Cicilline (D-R.I.), Jayapal and 29 other Members of Congress sent a letter to the Department of Justice, calling on it to investigate the proposed $43 billion merger of Discovery and WarnerMedia for violations of antitrust laws.
- In November 2021, Senator warren requested the Department of Justice to investigate the poultry industry's anticompetitive behavior as turkey and chicken prices soar.
- In June 2021, Senator Warren called on the FTC to engage in a broad" and "meticulous" review of Amazon's acquisition of Metro-Goldwyn-Mayer Studios (MGM) consistent with Section 7 of the Clayton Act, expressing concerns that the acquisition has the potential to harm consumers and workers, and reduce innovation.
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