Amazon Chief Executive Andy Jassy on Thursday took aim at regulators increasingly blocking mergers, including the company’s planned acquisition of the robot vacuum maker I am a robotwhich fell apart earlier this year amid antitrust concerns.
“I think it’s a really sad story,” Jassy said in an interview with CNBC’s Andrew Ross Sorkin on “Squawk Box” after the Amazon CEO released his annual shareholder letter. Jassy said the acquisition would enhance iRobot’s competitiveness against rivals, but regulators blocked the deal “because they were concerned that we would launch our own Roomba vacuum cleaner to compete with other products, which of course was not our model.”
Amazon abandoned its $1.7 billion acquisition of iRobot in January after European antitrust regulators and the Federal Trade Commission raised competition concerns. iRobot laid off 31% of its employees and its stock price has plummeted more than 75% this year.
Jassy said the move showed regulators “have more trust in these two major Chinese companies with maps of the inside of U.S. consumer homes than Amazon.”
The robot vacuum cleaner industry has become increasingly crowded in recent years, with Chinese companies such as Anker, Ecovacs, Roborock and SharkNinja chipping away at the market share that iRobot once dominated.
iRobot’s decision also comes as global regulators become more aggressive in trying to prevent further expansion by Big Tech companies, with the Biden administration making antitrust enforcement in the tech industry a top priority.
As the pace of big deals slows, technology companies have made a flurry of investments in artificial intelligence startups as they seek to gain a foothold in emerging markets.Amazon last month increased its stake in artificial intelligence startup Anthropic to $2.75 billion, which is also important Google as one of its biggest supporters. Microsoft Invested billions of dollars in OpenAI, the maker of ChatGPT.
Regulators have also focused their attention on these partnerships, with the Federal Trade Commission (FTC) launching an investigation into the deals 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 big tech deals.
Amazon also faces an ongoing lawsuit from the Federal Trade Commission. The agency sued Amazon in September, accusing it of operating an illegal monopoly that stifled competition and raised prices for consumers while increasing costs for sellers.
The lawsuit focuses on Amazon’s vast third-party marketplace, which is key to its e-commerce business. The marketplace currently accounts for more than 60% of items sold on the platform and includes numerous businesses generating 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 faster and faster. CNBC has previously reported that large online groups are trying to take advantage of Amazon’s size and lax return processes to conduct fraudulent refunds.
According to statistics, this has become a huge problem for retailers, costing them more than $101 billion last year a survey Presented by the National Retail Federation and Appriss Retail.
When asked how Amazon deals with return fraud, Jassy said the company has teams that review returns to make sure they are “appropriate.”
“At our scale, you find you get it all,” he added.
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