iRobot, manufacturer of the Roomba robot vacuum, has filed for bankruptcy. This is not unexpected. In October, after negotiations with a potential buyer fell through, the company announced that, “we may be forced to significantly curtail or cease operations and would likely seek bankruptcy protection." iRobot’s decline was partially due to the rise of new entries into the robot vacuum market, in particular the Chinese-made Roborock.
In 2024, Roborock led the global electronic vacuum market with 16% of global unit sales and 22.3% of the market's total revenue. While the Roomba is still the most popular robot vacuum in North America, the company’s global shipments fell by 6.7% last year, leaving their total market share at 13.7%. Roborock displaced iRobot in large part because they offered a wide range of innovative products designed to appeal both to consumers willing to pay more for a premium product with features, like a robotic arm to pick up socks, underwear, and your kids toys, and those searching for a simple and relatively inexpensive vacuum.
However, Roborock’s rise is not the sole, or even the main, cause of iRobot’s fall. iRobot was put on the path to bankruptcy by European Union bureaucrats, former Federal Trade Commission Chair Lina Khan, and Massachusetts Senator Elizabeth Warren. In 2023, Amazon announced plans to purchase iRobot for $1.65 billion. This would have given iRobot access to the capital and talent it needed to remain competitive with newer rivals like Roborock. However, a group of senators, led by Senator Warren, wrote to then-FTC Chair Khan requesting that the agency forbid Amazon from acquiring iRobot.
The senators felt that Amazon should not be allowed to “buy their way out of competition.” This statement ignores the fact that Amazon only made their bid to acquire the company after trying and failing to compete with iRobot. The argument also ignores the fact that many small tech companies attract investors with hopes that acquisition by one of the major tech companies will give them a large payday.
Before the FTC had a chance to stop Amazon from purchasing iRobot Amazon withdrew their offer to buy the company. They did this because they realized it would be impossible to gain approval from the EU’s antitrust regulators. According to EU Executive Vice President Margrethe Vestager, EU antitrust enforcers were “in close contact with the US Federal Trade Commission” during the EU’s investigation of Amazon’s proposed purchase of iRobot. So, Chair Khan did play a role in killing this deal. Immediately after Amazon pulled out, iRobot laid off a third of their employees and now faces the possibility of bankruptcy.
This is not the only instance in which Lina Khan worked with her EU counterparts to undermine US companies. Despite complaining that her agency was “underfunded”— Khan spent taxpayer money to send FTC staffers to the EU to help implement the Digital Markets Act (DMA). The DMA forced large tech companies (which the law labels as gatekeepers) to share their intellectual property with their competitors. Most of these “gatekeepers” are US companies like Amazon, Apple, Alphabet (parent company of Google and YouTube) and Meta (parent company of Facebook and Instagram). Thus, Khan used taxpayer money to make American tech companies less competitive.
Fortunately, Khan’s successor, Andrew Ferguson, has not only refrained from “cooperating” with foreign bureaucrats to harm US companies—but he has been openly critical of the EU’s attempts to regulate American tech companies like Meta and Alphabet, especially when those regulations could lead to violations of American’s First Amendment rights.
There are several ironies in the tale of iRobot’s decline. First, since iRobot is headquartered in Massachusetts, Senator Warren’s advocacy for blocking the company's acquisition benefitted a Chinese company at the expense of her own constituents.
Another irony is that, shortly after iRobot first announced it may have to file for bankruptcy, Lina Khan was named to the transition team of New York Mayor elect (and self-described democratic socialist) Zohran Mamdani. If Mayor Mamdani made this appointment because he wants to create a New York version of Khan’s “hipster Brandeisianism,” then New York’s businesses, workers, and consumers are in for a long four years…as Khan does for New York what she did for iRobot.
