Amazon and Roomba maker iRobot face antitrust and privacy complaints over acquisition

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Amazon’s startling announcement that it intends to acquire Roomba maker iRobot for $1.7 billion has prompted two main complaints from Big Tech critics in the past few days – one that deserves special attention. and one that puts a strain on credulity.

Let’s start with the most valid argument: it’s a violation of antitrust laws (or at least it should be).

The purchase of Roomba marks a natural extension of these ambitions. Massachusetts-based iRobot has about 75% of the U.S. smart vacuum cleaner market, with no looming competitor on track to topple the leader. Additionally, Amazon and iRobot have already worked together to integrate their respective Alexa and Roomba products, allowing owners to start their vacuum with voice command. (Google and Apple devices offer the same functionality.)

Given Amazon’s massive reach in e-commerce, cloud services, advertising and home products, any billion-dollar acquisition naturally draws howls from competition advocates. In theory, Amazon could use the iRobot deal to further crowd out Google and other smart home device competitors.

That’s a fair enough assertion, though it might collide with the realities of current antitrust law.

To stop the merger, the Federal Trade Commission would likely have to argue that the acquisition could “significantly” lessen competition in the smart vacuum space, a tough case to make at the moment.

It’s hard to say the deal would eliminate a competitor for Amazon, given that the tech giant doesn’t currently make a smart vacuum cleaner. Although the Astro shares some rudimentary traits with the Roomba, namely that it moves independently on the floor, it clearly lacks a vacuum. The FTC might classify the Roomba more broadly as a smart home device, rather than just a smart vacuum, but that feels like a stretch.

The best argument is that Amazon will undermine smart vacuum competitors by using its vast wealth to subsidize the sale of discounted Roombas. These fears, however, have not been a reason for stopping Big Tech mergers in recent years. And while FTC Chairwoman Lina Khan has promised more aggressive action against companies like Amazon, the courts will ultimately decide that fate.

Another claim is that Amazon could, in theory, use the Roomba as leverage to extract concessions from rival smart vacuum makers, such as providing more product data or spending more on e-commerce advertising. But Amazon knows that such a move, at least in the short term, would surely jeopardize the deal. Amazon also earned some brownie points on this front thanks to its support for Matter, a smart home interoperability standard designed to allow products from competing companies (including Apple and Google) to connect with each other. others.

Now for the more laughable argument: that the Amazon acquisition represents a major invasion of consumer privacy.

The objection, which gained ground after a viral Twitter feed Friday, by Institute for Local Self-Reliance senior researcher and writer Ron Knox, stems from Roomba’s ability to map customers’ home floor plans and theoretically push that data to Amazon headquarters. .

It is thought that Amazon might be able to calculate your income based on the size of your home, or your family status based on toys left on the floor by children, or your need for furniture due to a lack of obstacles. In turn, Amazon could target you more directly with ads.

This may be marginally the case, but it ignores the many other more useful datasets available to Amazon (not to mention other more invasive practices in the tech industry). Want to know the size of a client’s home? Link their address to public property records, which contain data on acreage and assessed value. Want to know if shoppers have munchkins going wild? Online purchase histories should provide a clearer and faster response.

And if consumers and policy makers are truly terrified of Big Brother Roomba, they have options. Customers can start by purchasing a (gasp!) handheld vacuum cleaner. Congress, meanwhile, can finally pass meaningful antitrust and data privacy legislation that has languished for years.

Amazon certainly hasn’t done much in the past two decades to earn our trust on the competition and privacy fronts. But under the current rules of the game, Amazon looks set to win yet again.

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Jacob Charpentier

NEW

Do you have to tip? Two local governments in China issued the first permits of the republic for driverless taxis, allowing the search engine giant Baidu to operate services in limited spaces in their cities, the wall street journal reported Monday. The moves illustrate China’s ambition to compete with the United States on the autonomous vehicle front, as both countries are still in the early stages of establishing regulatory frameworks for unmanned vehicles. Baidu plans to operate five driverless taxis each in Wuhan and Chongqing, China’s seventh and thirteenth largest cities, respectively.

A hard fall. investment giant Soft Bank posted losses of $21.7 billion in its tech-focused Vision fund’s latest quarter, the unit’s second-biggest quarterly loss ever, CNBC reported Monday. The slump stems from Vision Fund’s investment primarily in high-growth tech stocks, which boomed over the past few years before crashing in the first two quarters of 2022 as investors sought safer ground. . Founder of Softbank Son of Masayoshi pledged in May to go into “defense” mode and invest more cautiously in response to market conditions.

Come back for more. chip designer Qualcomm and semiconductor manufacturer GlobalFoundries reached an agreement on Monday to more than double the amount of chips created through their existing partnership, Reuters reported. The pair’s current deal extends to chips from Qualcomm for 5G transceivers, Wi-Fi products, auto parts and other electronics. GlobalFoundries is expected to manufacture the semiconductors at its New York factory, as well as facilities in Germany, France and Singapore.

Bring the thunder. The Treasury Department on Monday prohibits Americans from using crypto-mixing service Tornado Cash, citing its use by cybercriminals seeking to launder stolen money, CoinDesk reported. Blockchain analysts say hackers linked to the theft of $625 million from the Axie Infinity Ronin network earlier this year used Tornado Cash to launder their profits. Americans who violate the sanction could face criminal charges.

FOOD FOR THOUGHT

Stick to its core. Whereas Microsoft provides $68.7 billion to ActivisionBlizzard and Amazon pays billions for healthcare and smart vacuum companies, Apple is quietly sitting on the M&A side. A Bloomberg report on Monday notes the slowdown in Apple’s acquisitions since the start of 2021, with the iPhone maker spending just $202 million during that time. While Apple isn’t known for doing booming business compared to its Big Tech rivals, the pace of purchases is well behind the company’s history over the past decade.

From article:

This deal flow has slowed to a trickle. Apple has only made two known acquisitions in 2022: UK startups Credit Kudos and AI Music. The former of these two companies has developed technology for calculating credit scores, which will likely help Apple build its own infrastructure for financial products. The latter company used artificial intelligence to generate bespoke music.

Apple’s only known takeover in 2021 was the purchase of Primephonic, a classical music streaming service.

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BEFORE YOU LEAVE

Not much nice to say. Meta‘s BlenderBot 3 isn’t quite ready for prime time. Parent Facebook’s latest AI chatbot, launched to the public late last week, has spat all kinds of offensive and disturbing content questioned by curious reporters over the weekend, suggesting machine learning technology still has some way to go. BlenderBot displayed blatant anti-Semitic leanings, while replicating the rhetoric of Holocaust deniers from the 2020 election. At various times, BlenderBot also claimed to be Christian and asked for off-color jokes. Meta officials said the chatbot “may still make rude or offensive comments, so we’re collecting feedback that will help improve future chatbots.” Let’s hope so.

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