Amazon CEO Andy Jassy spurns regulators after failed iRobot deal: ‘It’s a sad story’

Amazon
CEO
Andy
Jassy
on
Thursday
took
aim
at
regulators
who
are
increasingly
blocking
mergers,
including
the
company’s
planned
acquisition
of
robotic
vacuum
maker


iRobot,
which
fell
apart
earlier
this
year
amid
antitrust
concerns.

“I
think
it’s
really
kind
of
a
sad
story,”
Jassy
said
in
an
interview
with
CNBC’s
Andrew
Ross
Sorkin
on
“Squawk
Box”
after
the
Amazon
chief

released
his
annual
shareholder
letter.
The
acquisition
stood
to
give
iRobot
a
competitive
boost
against
rivals,
Jassy
said,
but
regulators
blocked
the
deal “because
they
worry
that
we’re
going
to
feature
our
vacuum
cleaner,
the
Roomba,
vs.
others,
which
of
course
is
not
our
model.”

Amazon

in
January
walked
away
from
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
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
large
Chinese
companies
with
maps
of
the
inside
of
U.S.
consumers’
homes
more
than
they
do
Amazon.”

The
robotic
vacuum
industry
has
become
increasingly
crowded
in
recent
years,
with
companies
like
China-based
Anker,
Ecovacs
and
Roborock,
as
well
as
SharkNinja,
eating
into
iRobot’s
once-dominant
share
of
the
market.

The
iRobot
decision
also
comes
as
global
regulators
have
been
more
aggressive
in
attempting
to
block
Big
Tech
companies
from
expanding
further,
with
the
Biden
administration
making
antitrust
enforcement
in
the
tech
sector
a
top
priority.

As
megadeals
have
slowed
to
a
crawl,
tech
companies
have
made
a
flurry
of
investments
in
artificial
intelligence
startups,
seeking
to
gain
a
foothold
in
the
burgeoning
market.
Amazon
last
month added
$2.75
billion to
its
stake
in
AI
startup
Anthropic,
which
also
counts


Google
as
one
of
its
biggest
backers.


Microsoft
has
invested
billions
in
OpenAI,
the
maker
of
ChatGPT.

Regulators
have
zeroed
in
on
these
partnerships
as
well,
with
the
FTC

launching
an
inquiry
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
by
the
FTC.
The
agency

sued
Amazon
in
September,
accusing
it
of
operating
an
illegal
monopoly
that
stifles
competition
and
raised
prices
for
consumers,
while
increasing
costs
for
sellers.

The
lawsuit
centers
on
Amazon’s
sprawling
third-party
marketplace,
which
is
the
linchpin
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.

Through
the
years,
Amazon
has
built
a
well-oiled
fulfillment
and
logistics
machine
that
enables
it
and
third-party
sellers
to
deliver
products
to
customers
at
increasingly
breakneck
speeds.

CNBC
previously
reported
that
a
massive
network
of
groups
have
sought
to
take
advantage
of
Amazon’s
scale
and
lenient
returns
processes
by
carrying
out
fraudulent
refunds.

It’s
ballooned
into
a
massive
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
is
tackling
returns
fraud,
Jassy
said
the
company
has
teams
charged
with
examining
returned
goods
to
make
sure
they’re “appropriate.”

“At
our
scale,
you
find
you
get
some
of
everything,”
he
added.