Specifically, the Lina Khan treatment
Big Tech companies have consolidated their leading positions in various industries by making strategic and sometimes downright anti-competitive acquisitions. The Federal Trade Commission has been keeping a keen eye on Big Tech — even more so since Lina Khan, a competition hawk, was sworn in as the agency’s chair in June 2021. Fast forward to August this year when Amazon said it would acquire iRobot, the company behind the wildly popular Roomba robot vacuum. Investors floated concerns about whether the deal would draw regulatory scrutiny and it seems like those concerns were validated with the FTC now seeking further clarification on Amazon’s deal with iRobot.
iRobot confirmed the development in a notice filed with the Securities and Exchange Commission saying that the FTC has sought “additional information and documentary materials” from the company and Amazon. While this doesn’t necessarily mean the end of the merger, it certainly highlights the FTC’s willingness to look into allegations of anti-competitive practices by Big Tech companies. Amazon hasn’t commented on the agency’s request for more information. The FTC didn’t have much to say either.
As CNET notes, Amazon is also awaiting regulatory approval for its acquisition of One Medical, a company owned by 1Life Healthcare, and an indication of Amazon’s growing ambitions in the healthcare sector.
Amazon’s announcement of the iRobot acquisition in August was greeted with criticism by organizations like Color of Change, the International Brotherhood of Teamsters, and Fight for the Future, who wrote a joint open letter addressing fears of Amazon collecting large swathes of data from Roomba users. The letter also voiced concerns about the company acquiring an industry rival to solidify its position in the market.
Amazon has been accused of bullying vendors and manufacturers who use its e-commerce platform in different ways such as taking away purchase buttons for a vendor’s product listings if the company found the vendor selling the same product at a lower price on a competing site. The state of California is suing Amazon for this behavior (via TechCrunch). Acquiring a market-leading competitor would give Amazon more leeway to bump off other players in the space.
Prior to being appointed the FTC chair, Lina Khan was a legal scholar who closely studied antitrust complaints against Big Tech firms like Amazon, Google, and others. Amazon believes this is a conflict of interest and has requested Khan to recuse herself from any investigations involving the company. The FTC officially started its review of the Amazon-iRobot merger earlier this month (via Reuters) and is now seeking additional information related to the deal.
