Amazon CEO Andy Jassy on Thursday took aim at regulators who are increasingly blocking mergers, including the company’s proposed acquisition of a maker of robotic vacuum cleaners. I robotwhich collapsed earlier this year due to antitrust concerns.
“I think it’s a really sad story,” Jassy said in an interview with CNBC’s Andrew Ross Sorkin on “Squawk Box.” The acquisition was supposed to give iRobot a competitive advantage over rivals, Jassy said, but regulators blocked the deal “because they’re concerned that we’re going to pitch our vacuum, the Roomba, over others, which of course is not our model.”
Amazon in January abandoned its plan to acquire iRobot for $1.7 billion after Europe’s antitrust watchdog and the Federal Trade Commission said it raised competition concerns. iRobot has laid off 31% of its staff and its shares have plunged more than 75% so far this year.
Jassy said the move showed that regulators “trust these two big Chinese companies more than Amazon when it comes to maps of the inside of American consumers’ homes.”
The robotic vacuum cleaner industry has become increasingly crowded in recent years, with companies such as Chinese firms Anker, Ecovacs and Roborock, as well as SharkNinja, eating into iRobot’s once-dominant market share.
iRobot’s move also comes as global regulators have been more aggressive in trying to prevent big tech companies from expanding further, with the Biden administration making antitrust enforcement in the tech sector a top priority.
As megadeals slow, tech companies have made a wave of investments in artificial intelligence startups, looking to gain a foothold in this booming market. Amazon last month added $2.75 billion to its stake in AI startup Anthropic, which also counts Google among its biggest backers. Microsoft has invested billions in OpenAI, the creator of ChatGPT.
Regulators have also focused on these partnerships, with the FTC launching an investigation into these agreements in January.
“I think people don’t know what they can do right now,” Jassy said. He urged regulators to be “more reasonable” in their stance on deals with Big Tech.
Amazon also faces an ongoing lawsuit from the FTC. The agency sued Amazon in September, accusing it of operating an illegal monopoly that stifles competition and raises prices for consumers, while increasing costs for sellers.
The lawsuit focuses on Amazon’s vast third-party marketplace, which is the backbone of its e-commerce business. The marketplace now accounts for more than 60% of goods sold on the platform and includes numerous businesses that generate millions of dollars in annual revenue on the site.
Over the years, Amazon has built a well-oiled fulfillment and logistics machine that allows it and third-party sellers to deliver products to customers at increasingly breakneck speeds. CNBC previously reported that a vast network of groups had sought to take advantage of Amazon’s scale and lenient returns processes by issuing fraudulent refunds.
This has turned into a huge problem for retailers, costing them more than $101 billion last year, according to a survey by the National Retail Federation and Appriss Retail.
When asked how Amazon fights returns fraud, Jassy said the company has teams that review returned merchandise to make sure it’s “suitable.”
“At our scale, you get a little bit of everything,” he added.
cnbc
