Some 30 years ago, three artificial intelligence researchers from MIT launched iRobot with a dream of revolutionizing robotic assistants. Building on the founders’ background in space exploration and military defense, the company introduced robots used to search through the debris of the World Trade Center after 9/11 and assess damaged nuclear reactors in Fukushima. With additional investors on board, I watched as iRobot pivoted in the late 90s to a new mission: reshaping the world of in-home robotics.
Sadly, after decades of growth, iRobot has now run into challenges even their agile robots can’t solve. First, the company has struggled to compete on an uneven playing field against Chinese competitors who benefit from government support, low-cost capital, and limited intellectual property enforcement that allows copycat products. More recently, iRobot has faced an even more formidable challenge: so-called “competition” enforcers in the U.S. government.
While Beijing has focused on producing world-leading robotics companies, the U.S. Federal Trade Commission (FTC) under President Biden has upended growth and funding opportunities for American companies. Case in point: the recent collapse of iRobot’s acquisition by Amazon. This deal gave a successful American business a fighting chance to compete. It didn’t fail because either company got cold feet, or Amazon doubted the product quality of iRobot, a company whose innovations have been foundational to growth in the now-booming robotic cleaning market. Instead, it was the imposition of “undue and disproportionate” regulatory hurdles after European regulators made clear they would block the merger. The news tanked iRobot's stock price, which plunged nearly 70% since the deal’s announcement, and forced layoffs of nearly a third of its staff – more than 350 people.
The destruction of American tech jobs in an already challenging time for the technology industry is bad enough. But it gets worse. In a statement following the collapse of the deal, Margrethe Vestager, head of the European Commission responsible for media and information, touted the agency’s cooperation with the U.S. Federal Trade Commission (FTC) in its investigation into Amazon’s iRobot acquisition. Two days later, the FTC followed with its own statement expressing their delight that the companies had abandoned the deal. In short: the U.S. government is working to choke the life out of disfavored American companies, and enlisting the support of other countries to do so.
This latest attack on American innovation is simply another episode in the FTC’s misguided crusade against some of America’s most successful tech companies. Under Chair Lina Khan, the FTC has initiated a series of high-profile and mostly failed antitrust lawsuits under the theory that big American companies should not acquire smaller ones. While launched under the banner of ‘preserving competition,’ this strategy – and the collapse of deals like the Amazon/iRobot acquisition – actually reduces market competition by hurting the startups and small businesses who fuel that competition. Fundamentally, many investors won’t invest in startups without acquisition as an exit option on the table. And iRobot, like most smaller companies, does not have the resources to scale its products alone. That’s certainly why the company embraced acquisition by Amazon in the first place.
The European Commission’s plan to block the deal also misrepresents, willfully or otherwise, the state of play in the robotic vacuum industry. iRobot is a major player, but it’s locked in fierce competition with companies who already hold significant global market share. As of 2022, Chinese companies like Anker, Ecovacs, Dreame and Roborock had captured nearly half of the robot vacuum market. In Europe specifically, that number is even higher. That’s not to mention competition from major consumer technology brands like Shark, Dyson and Samsung.
The global race to excel in robotics has pitted iRobot against Chinese government-backed champions. The European Commission’s decision to block the merger, made in collaboration with our own FTC, not only causes near-term job and economic losses. It also risks the loss of potential investments by iRobot in R&D and capability developing in this cutting-edge tech field.
That our own government would undercut efforts by promising American companies to better compete in the global marketplace is nothing short of a travesty. If we want the United States to remain an innovation leader – and American companies to remain competitive with rivals facing support rather than regulatory blockades in their counties of origin – we need an approach that actually serves both consumers and competition.
American technological leadership is not manifest destiny. The best efforts of American innovators will not survive a government campaign to undermine investment, progress and our ability to compete. If we don’t find some way to change course, we might as well all start learning Mandarin.
