Washington, D.C. (1/23/2023) – Following news reports that the European Union Commission (EC) “intends to block” Amazon from acquiring the struggling U.S. company’s iRobot, several leading industry groups detailed the negative impact this decision would have on consumers and the flawed logic behind the EC’s approach.
Matt Schruers, President & CEO of the Computer and Communications Industry Association, highlighted that such an acquisition could actually lead to increased competition in this space, saying:
“If the objective is to have more competition in the home robotics sector, this makes no sense. There is no plausible risk to competition from a U.S. retailer acquiring a struggling U.S. vacuum maker in a sector overtaken by dynamic Chinese manufacturers. Blocking this deal may well leave consumers with fewer options, and regulators cannot sweep that fact under the rug.”
President and Founder of the International Center for Law and Economics Geoffrey Manne cut into the EC’s logic with a thread on X:
The article says the basis for blocking would be the possibility that AMZ “might” limit or foreclose competitors from selling on http://amazon.com. Really? 2/9
Something like 60% of sales on Amazon are by sellers other tha[n] Amazon. Amazon has no incentive to foreclose others’ sales — sales by others is Amazon’s raison d’être! 3/9
Manne goes on to show how the European Commission is basing its possible decision on the presumption that something might happen, then details how “[s]elf-preferencing claims are just bad economics (and law).”
Chamber of Progress CEO Adam Kovacevich called it “an embarrassingly small ball move by the EU.” He then went on to quote the UK’s Competition and Markets Authority, which, in its report clearing the deal, stated “there are strong competitors in the supply of RVCs in the UK and that consumers have a range of alternative suppliers to choose from.”
CCIA’s “Don’t Break What Works” campaign noted that the EC’s decision follows “a pattern in which European regulators have singled out U.S.-based businesses with discriminatory regulations. Reports that the European Commission may attempt to block this acquisition underscores the need for the Biden administration to take a stronger stand for American businesses on the global stage and push back on international efforts to weaken U.S. companies’ ability to compete abroad.”
Notably, stock prices for the struggling U.S. company iRobot sunk after reports of the European Commission’s intentions were made public.
The Don’t Break What Works campaign is powered by the Computer and Communications Industry Association (CCIA). Learn more here.