A handful of Democratic lawmakers led by Massachusetts senator Elizabeth Warren added their name to a growing chorus of activists calling on the Federal Trade Commision to slam the brakes on Amazon’s $1.7 billion iRobot acquisition. The lawmakers warned the deal if allowed to go through, would harm consumers and, “reduce competition in the home robotics market.”
The lawmakers fired shots at Amazon, telling the FTC the company has, “a record of anti-competitive and exploitative practices.” In this particular case, the lawmakers argued Amazon only opened up its wallet for the Roomba maker after a “lackluster” public response to its own R2-D2 like Astro home robot. Amazon’s come to dominate the smart home market, with one of its devices currently equipped in around a third of all U.S. households. The letter claims Amazon achieved this dominance, in large part, through an assortment of “aggressive acquisitions” closely resembling the iRobot deal.
“Rather than compete in a fair marketplace on its own merits, Amazon is following a familiar anticompetitive playbook: leveraging its massive market share and access to capital to buy or suppress popular products,” the lawmakers wrote.
The letter also raises the possibility that Amazon could potentially use data gleaned from iRobot devices to promote its own devices and “further establish its dominance with consumers.” By crowding out competitors and using their data to bolster Amazon’s own products, the lawmaker claims Amazon “locks in” customers in its ecosystem, making it taxing to leave.
In a statement sent to Gizmodo, an Amazon spokesperson refuted the lawmaker’s claims and said the letter, “is broadly inaccurate.”
“We will continue to cooperate with regulators, and we are confident that this deal is procompetitive and will make customers lives better and easier,” the spokesperson said.
In a phone interview with Gizmodo, Public Citizen Competition Policy advocate Matt Kent praised the lawmaker’s letter and agreed with their emphasis on the larger scope of Amazon’s alleged anti-competitive practice.
“This is not about vacuums,” Kent said. “This is really about smart devices in your home.”
Kent went on to say Amazon’s attempts to acquire iRobot looks like a “worst case repeat” of the 2018 Ring acquisition. As with Ring, Kent said the iRobot deal raises both consumer privacy and civil liberties concerns in addition to worries over fair competition.
“This is scary stuff,” Kent added. “This is a direct line into the most intimate details of our personal lives.”
“Amazon is once again using its market power and immense capital to take over another sector,” American Economic Liberties Project Senior Policy Analyst Krista Brown told Gizmodo. “Instead of investing in its own R&D to compete on the merits (which it tried to do and failed), it is choosing to buy iRobot’s leading position and entrench its power in yet another business line.”
Brown, who also said she supported the lawmaker’s letter, said the Amazon deal would go beyond the smart vacuum market and amounted to “moat building” to keep rivals at bay.
“Amazon will know about your health, your home, what you watch, what you read, what you eat,” Brown said. it’s an impossible amount of data and consumer insight to compete with on fair terms.
The lawmakers’ letter follows on the heels of another letter signed by more than a dozen activist groups calling on the agency to kill the acquisition. In that case, the organizations, which included Fight for the Future, Public Citizen, and Athen amongst their ranks, argued the deal would “endanger fair competition,” and jeopardize consumer privacy.
Like the lawmakers, the activists argued Amazon’s leveraging its immense wealth and market dominance to essentially copy or kill its leading competition. The Democratic senators also echoed the activists’ concerns regarding ways Amazon could potentially use video footage pulled from Roombas and other iRobot products to surveil the interior of customers’ homes.
A potential clash between the FTC and Amazon’s looking more and more likely. While other major tech firms like Meta and Google have somewhat stepped off the acquisition gas in response to tougher antitrust rhetoric from regulators, Amazon’s put its pedal to the metal. In less than three months, the company announced its intentions to acquire iRobot, concierge healthcare provider OneMedical and warehouse robotics company Cloosterman which combined will cost well over $5.6 billion. Those acquisitions come just one year after the company dished out $9 billion to buy MGM Studios, another deal the FTC’s reportedly looking into. Amazon’s all but daring regulators to step in their path.
Amazon’s beef with the FTC, and in particular Chairwoman Lina Khan, runs deep. Khan laid the groundwork for her reputation as a Big Tech critic with a 2017 Yale Law Review Paper called, “Amazon’s Antitrust Paradox.” Amazon referenced that work and other academic papers last June in a fear-filled 25 page motion calling on the agency to recuse Khan from cases involving Amazon over apparent conflicts of interests. That clearly didn’t happen and now Khan, and the FTC have their sights set on Amazon.
And while the agency has faced criticism from both the political left and right for so far failing to deliver any huge, lasting blows to Big Tech, Kent of Public Citizen said they’re still making inroads despite significant challenges in the judiciary and some hesitation within the agency’s staff.
“The quality over quantity matters from our perspective,” Kent said, speaking to the relatively light number of merger enforcements during the Biden administration so far. “They [the FTC] are trying to tackle corporate consolidation with one hand tied behind their back so being strategic is good.”
Update 2:24 P.M.: Added statement from Amazon.