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iRobot, the maker of Roomba, is pursuing a buyout by a Chinese company after filing for bankruptcy in December. The company lost its opportunity to be acquired by an American firm, Amazon, in large part due to interference by the U.S. Federal Trade Commission and opposition from the European Commission.

That loss will chill innovation throughout the U.S. economy and empower a foreign competitor.
 
The background: Amazon announced that it had agreed to buy iRobot in August 2022, but the FTC opened an investigation into the deal soon after (Reason).

• Meanwhile, “Sen. Elizabeth Warren (D–Mass.) and several Democrats in the House of Representatives sent a letter to then-FTC Chair Lina Khan, saying ‘the FTC should use its authority to oppose the Amazon–iRobot transaction,’” and alleging that Amazon was attempting to corner the market for smart vacuums.
• Next, “The European Commission—the governing body of the European Union—soon launched its own investigation. Commissioners later signaled that, among their objections, a merger ‘may restrict competition in the market for robot vacuum cleaners.’”
• In January 2024, Amazon and iRobot abandoned the proposed sale. iRobot continued to lose money and cut staff, which culminated in its bankruptcy filing—and its expected sale to the Chinese manufacturer.

The wrong result: iRobot co-founder and former CEO Colin Angle decried the FTC’s actions in a recent interview with Fox News.

• “I bet if you asked almost anyone prior to the blocking of the deal with iRobot: Would you rather see iRobot innovating like crazy, coming out with new and better robots for your home, or would you like to see it file for Chapter 11 in the process of being sold to a Chinese manufacturer?” he said. “The wrong thing probably happened.”

A chilling effect: “It’s a tragedy for the innovation economy, because every entrepreneur, every investor in a venture is counting on there being an exit, so blocking M&A by big tech for reasons disconnected with monopolistic behavior has a chilling effect on the certainty that any investor or entrepreneur should feel about selling their company,” he continued.

The bottom line: “[T]he bankruptcy filing of iRobot is a very powerful cautionary tale of what happens when the government forgets that their goal is to strengthen the U.S. economy, protect the consumer and instead allows other motivations to win out,” Angle said.