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Amazon/iRobot corporation – Data privacy considerations in the world of home mapping

Nina Jayne Carroll

Amazon/iRobot corporation – Data privacy considerations in the world of home mapping
South_agency via Getty Images

Amazon/iRobot corporation – Data privacy considerations in the world of home mapping

Data privacy has increasingly become a common consideration for competition authorities from Brussels to Washington alike when substantively reviewing a deal.  Despite the general absence of a formal mandate to consider data privacy in most competition law regimes, recognising that a significant number of deals involve material data sets or privacy aspects is evident and is increasingly forming a routine part of competitive analysis.  The impact a deal can bring to consumer choice and control in particular, tends to be a key consideration at the substantive review stage.

Parallel review of the deal in both the UK and EU

Amazon is no stranger to antitrust regulation, with several of its recent deals garnering regulatory scrutiny.  The tech goliath has recently turned its attention to acquire the manufacturer of ‘Roomba’, home robot vacuum cleaners, iRobot Corporation.  In early April, the UK’s Competition and Markets Authority (“CMA”) confirmed that it had commenced an investigation into the proposed USD 1.7 billion acquisition.  The deadline for the CMA to announce progression to a Phase 2 merger review is 16 June 2023.  Similarly, the EU Commission also has until 6 July 2023 to decide if the deal will be cleared (unconditionally or with remedies) or investigated further.

While in the very early stages of investigation in both jurisdictions, the interest as to the privacy considerations at play with this deal is worthy of discussion.  Concerns surrounding big tech acquiring large data sets is not new; however, the acquisition of home mapping data is unusual and gives rise to unique privacy concerns.  This is especially the case given the potential interaction of Amazon’s Alexa and the iRobot product offering.  Given the on-going expansion of the Internet of Things, in addition to the potential for growth in the smart home space, it is not the vacuum cleaner aspect that may cause as much interest from a competition perspective, but the data collecting technology that enables home robotics devices to operate.

Nuanced theories of harm and the potential impact of this on deal assessment

Notably, the CMA has more recently displayed a willingness to explore more nuanced theories of harm and to block deals involving large tech companies.  Specifically, with regard to theories of harm, even if a business is not yet competing with a buyer or even planning to enter the buyer’s market but has the potential to do so, the CMA may consider this a possible threat to competition should that business be acquired.  A willingness for regulators to consider different lenses through which to view a deal and innovative marketplaces, based on impacts to competition that arise from acquiring large / unique data sets or advancing technology, could prove concerning for parties involved in deals such as Amazon/iRobot.  For example, when Facebook sought to acquire GIPHY, the CMA raised concerns that GIPHY could be a potential competitor to Facebook in the digital marketing space.  It determined that GIPHY had the potential to expand into digital advertising in a way that would have led it to compete horizontally with Facebook.  This type of theory of harm can be viewed as providing a developing avenue for the CMA (and other regulators such as the European Commission that has deployed this theory of harm also) to regulate acquisitions in the big tech space. More recently, the CMA’s decision to block the Microsoft/Activison deal also displays a regulator who will block a deal involving a more ‘nuanced’ marketplace, in that deal; cloud gaming, if it sees fit. This is in contrast to the European Commission’s conditional clearance of the deal.

Depending on how the CMA defines the market for Amazon/iRobot in particular, and how it considers the importance of the relevant data at play in the deal, the area of home mapping data could face scrutiny as a nuanced and unique market which could ultimately impact how the CMA assesses the deal. The CMA’s enthusiasm as a regulator, and willingness to employ forward looking theories of harm or to block tech deals outright may prove noteworthy for this deal given the potentially significant impact that an acquisition of home mapping data by Amazon could have on competition and consumers.  Such investigation of Amazon and its proposed acquisition of iRobot could further provide an opportunity for the CMA to showcase a new era of digital enforcement and privacy considerations in substantive review. 

One thing is clear however, with a recent Ofcom announcement in the UK to investigate into the practices of Amazon, continued interest in the firm in the UK and beyond is evident, and the remainder of 2023 appears set to continue this trend.

This article was prepared by the Antitrust Law Section's Privacy and Information Security Committee.