More than two dozen civil organisations and advocacy groups are calling on the Federal Trade Commission to block Amazon’s $US1.7 ($2) billion acquisition of Roomba maker iRobot. If allowed to go through, the advocates warn the deal could “endanger fair competition,” and jeopardize consumer privacy.
Fight for the Future, Public Citizen, and Athena were among the 26 organisations that sent an open letter to the FTC’s five commissioners on Friday. The groups view Amazon’s acquisition of iRobot, which they described as a “competing smart home device business” as an anti-competitive action that could harm the overall consumer technology market.
Amazon and iRobot finalised their merger agreement last month in an all cash deal valued at $US1.7 ($2) billion. Though Amazon recently dabbled with a deceptively cute home robot called Astro and this terrifying home surveillance drone, its presence pales in comparison to iRobot, the leader in consumer robotics.
“Amazon seeks to unduly expand its market power by eliminating a competitor through acquisition, rather than through organic growth,” the groups wrote. “The company also aims to minimise fair competition by exploiting consumer data not accessible to other market participants.”
That “consumer data” refers to detailed video footage of customers’ homes and floor plans constantly sucked up by iRobot’s Roomba and other home devices. That type of data is potentially well worth the $US1.7 ($2) billion Amazon intends to spend on the company if for nothing else than to determine more useful shit to sell you through its main business. Privacy advocates, however, fear Amazon — which already has smart devices hooked up in around a third of U.S. households — could potentially misuse that potentially sensitive data. Critics, including some U.S. senators, warn we’ve already witnessed a version of this through Amazon-owned Ring sharing user data with police without its owners’ consent or a police warrant.
“There is no more private space than the home,” the letter reads. “Yet with this acquisition, Amazon stands to gain access to extremely intimate facts about our most private spaces that are not available through other means, or to other competitors.”
Amazon did not immediately respond to Gizmodo’s request for comment.
Bigger than robots
While Amazon’s recent acquisition attempt is significant, the groups warn Amazon’s iRobot deal amounts to a symptom of a larger problem.
“Amazon’s business model largely relies on acquiring rivals, sometimes in adjacent markets, and then rapidly expanding through anti-competitive predatory pricing while leveraging vast troves of consumer data to grow its overall grip on the economy,” the letter reads.
To bolster that point, the groups pointed to Amazon’s 2018 acquisition of smart doorbell maker Ring. Within three years, Ring transformed from a successful but growing product to the undisputed king of smart doorbells. That sudden market annihilation, the groups argue, was only made possible through Amazon pushing the product through its “ubiquitous” e-commerce platform at below market price points.
iRobot’s Roomba, the groups argue, could follow a similar path. The groups warn Amazon could push the product toward dominance through “anti-competitive pricing” and then take the troves of data from those devices to “further entrench their monopoly power in the digital economy” Roomba, will in effect feed the already engorged Amazon data beast.
“In short, the deal will further entrench Amazon’s hold on the smart home technology ecosystem, eliminate competition in that sector and enhance the company’s monopoly power,” the groups wrote.”
Friday’s letter dropped the same day Amazon announced its intention to acquire Belgian warehouse robotic maker Cloostermans. Amazon has reportedly worked with Cloostermans since 2019 to improve its growing line of warehouse robots. Now the firm and its roughly 200 employees will fold into the company’s Amazon Robotics Division. On paper, this acquisition should exist separately from iRobot. Last month an Amazon spokesperson told Gizmodo the company had “no plans” to use iRobot’s tech in its warehouses.
The FTC, for its part, isn’t totally out of the loop on this issue. Earlier this month, according to a Politico report, the agency officially began a review of the iRobot deal to determine whether or not it violates antitrust laws. That review, which marks the first step before an official investigation, allegedly covers questions over whether the deal will illegally increase Amazon’s market share in the connected device market and the retail market. Lina Khan, the FTC chair, is a noted Big Tech critic who cut her teeth with a 2017 Yale Law Review Paper called, “Amazon’s Antitrust Paradox.”
This deal, in other words, is right in her wheelhouse.