'How Lina Khan Killed iRobot' (wsj.com) 74
iRobot, the Bedford, Massachusetts-based company that brought the Roomba vacuum cleaner into American homes over its 35-year history, filed for bankruptcy on Sunday and will be acquired by Picea, its Chinese contract manufacturer that also produces competing household devices.
The Wall Street Journal's editorial board placed blame for the company's demise on the Federal Trade Commission under Chair Lina Khan, which opposed Amazon's $1.7 billion bid to acquire iRobot. That deal collapsed in January 2024 amid regulatory pressure from both the FTC and European antitrust authorities. Senator Elizabeth Warren and other progressives had urged Khan to block the acquisition, arguing in a September 2022 letter that Amazon is "'almost universally recognized' as the leader in warehouse and fulfillment robotics space" and that the deal "would open up a new market to Amazon's abuses."
After the deal fell through, iRobot cut 31% of its workforce and moved "non-core engineering functions to lower-cost regions." The company had shifted production to Vietnam to reduce its exposure to China but was hit by tariffs under Trump's Liberation Day trade measures -- initially 46%, later reduced to 20%. iRobot said the trade uncertainty made it difficult to operate.
The Wall Street Journal's editorial board placed blame for the company's demise on the Federal Trade Commission under Chair Lina Khan, which opposed Amazon's $1.7 billion bid to acquire iRobot. That deal collapsed in January 2024 amid regulatory pressure from both the FTC and European antitrust authorities. Senator Elizabeth Warren and other progressives had urged Khan to block the acquisition, arguing in a September 2022 letter that Amazon is "'almost universally recognized' as the leader in warehouse and fulfillment robotics space" and that the deal "would open up a new market to Amazon's abuses."
After the deal fell through, iRobot cut 31% of its workforce and moved "non-core engineering functions to lower-cost regions." The company had shifted production to Vietnam to reduce its exposure to China but was hit by tariffs under Trump's Liberation Day trade measures -- initially 46%, later reduced to 20%. iRobot said the trade uncertainty made it difficult to operate.
iRobot couldn't afford to operate. (Score:5, Insightful)
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KHAAAAAAANNNN!!!
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Amateur. It's more like:
*drops to knees* KHAAAAAAAAAAAAANNNNN!
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If not achieving a merger was the death-stroke, they weren't stable in the first place.
I mean your not technically wrong, but you just described 95% of all US companies in the technology sector... They literally exist to either get bought or die. No one is investing in almost any of them with hopes of long term growth and stability. The only reason they exist is to get bought by one of the big fish, that is literally what defines success for their investors.
The point is if your metric for a successful tech company is having functional products and stable growth (meaning they can mostly fund t
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consumers should leverage boycott more powerfully, frequently, and potently to disrupt business that abuse.
The scale we are talking about here is just prime collective action problem [wikipedia.org], the reason we have and had to create these regulatory agencies is because this doesn't work.
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Exactly. Whatever the rules are going to be; they need to be objective, entirely impartial, deterministic in their metrics and outcomes, and published and known to ALL parties in advance. No pinhead bureaucrat or crooked politico should have any say whatsoever beyond "Is this number higher or lower than this other number?". NO moving targets, NONE of that "definition of obscenity" BS that you already mentioned.
Re: iRobot couldn't afford to operate. (Score:3)
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The point is if your metric for a successful tech company is having functional products and stable growth (meaning they can mostly fund themselves through profits), could you please point one out to me that isn't Nvidia, Microsoft, Apple, Amazon, Oracle, Tencent, or some other huge conglomerate?
Valve
Re:iRobot couldn't afford to operate. (Score:5, Informative)
It's the Washington Post that Bezos owns, not the Wall Street Journal.
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D'oh, I mixed up the big conservative papers that start with W...same problems though, just minus the conflict of interest.
Re: iRobot couldn't afford to operate. (Score:3)
Are you serious? Besides being seriously cowardly
Re:iRobot couldn't afford to operate. (Score:4, Insightful)
D'oh, I mixed up the big conservative papers that start with W...same problems though, just minus the conflict of interest.
The Washington Post is hardly "conservative", unless your definition is "any news source that doesn't slavishly repeat the Democrat talking points is conservative"
Re: iRobot couldn't afford to operate. (Score:1)
They weren't. Now they slavishly repeat conservative talking points. Occasionally a liberal article gets through... Then there is a termination.
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https://www.pbs.org/newshour/p... [pbs.org]
for someone who has such a strong opinion on the news it's pretty clear you don't read it
Your link is to this article: "Washington Post owner Jeff Bezos says opinion pages will defend free market and ‘personal liberties’"
So in your view, defending free markets and personal liberties on the opinion pages makes the Washington Post a conservative newspaper. LOL.
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His point was probably that it was owned by Bezos.
You could google "why bezos owning the post is bad" or something if you don't get it
Re: iRobot couldn't afford to operate. (Score:2)
Nonsense. The opinion pages in the WSJ have always leaned right. William F Buckley , a terrible man, used to have a regular opinion column. The current ones are no better.
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Nonsense. The opinion pages in the WSJ have always leaned right. William F Buckley , a terrible man, used to have a regular opinion column. The current ones are no better.
He was talking about the Washington Post. Bezos doesn't own the WSJ
My, how unpalatable antitrust is to the crowd who (Score:2)
...are pushing massive trade-war tariffs.
We've actually been playing this rotten game – "lets not prevent monopolies because Euro/China global brands will out-compete our boys" – for decades now. The tariffs just turbo-charge the process.
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This is how it works on global markets. Small ones do not have pockets to invest enough to remain competitive at volumes required. You need the capital and the people with narrow expertise in several fields that only really can find enough work in very large corporations.
But without whom you're not going to be competitive.
Notably Chinese understand this, which is why their model that crushed iRobot largely worked in the opposite direction.
Take Roborock for example. It started as a de facto part of Xiaomi (i
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Re: iRobot couldn't afford to operate. (Score:2)
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Well, and not only that, but the article itself clearly says that it was the tariffs that killed the company, not Lena Khan. So the headline looks a bit like it's just clickbait nonsense, and Lena Khan had nothing to do with this. Sure, if Amazon had acquired them, maybe they would have operated at an apparent loss in order to collect all that hot hot private home use data, but that would not have been a win.
The worry that iRobot would be acquired by Amazon was reason enough for me to disable my device
not the tariffs honest (Score:5, Insightful)
Re:not the tariffs honest (Score:5, Insightful)
It was meddling by both D and R in our economy, both were scared of invisible boogiemen of "something bad might happen".
Fear is a great motivator. Courage is standing in the face of danger understanding the risks might be worse doing nothing than doing something. This is a calculated risk and ought to be rewarded in the marketplace if it is correct.
Conglomerates are neither good nor bad in and of themselves. The good is they offer efficiencies in the marketplace. The bad is they take advantage of those efficiencies and often get "too big to fail" (a lie).
People guessing who have no stake in the market are making bad choices, because of other reasons. Both D and R do this. I call it the "There ought to be a law" reactions. Nobody stops long enough to say "no there shouldn't be".
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It wasn't the ridiculous tariffs, it was the FTC!
As much as I'd like to blame Trump for everything, the reality was blaming the tariffs for this is as stupid as blaming the fact another company didn't buy them. The reality is iRobot was a dying business which has been in financial strife for years. They were desperate to be bought in 2023, and as much as the orange moron did exist, he wasn't president at the time.
iRobot hasn't made a profit since early 2022. In fact their net losses from Q2 2022 to Q2 2023 were more than all their profit combined from the
Selling Defense killed iRobot (Score:4, Interesting)
The Defense division was the real money maker and splitting it off is what killed the consumer company. The thing that killed the buyout was the fear of an Alexa Vacuum Cleaner, not warehouse automation.
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They had a defense version of iRobot vacuum? Huh!
Re:Selling Defense killed iRobot (Score:5, Funny)
Yeah, it sucked though.
Probably not solely (Score:2)
I have to think that there were a few other steps between #1 seller of robotic vacuums and chapter 11. Maybe even 10 chapters :-)
Guh. How long until my 'bot is a brick.
Nobody ever learns this lesson (Score:5, Insightful)
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iRobot quit doing R&D, too.
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Indeed. In fact, activist shareholders forced the board to stop spending on R&D, and to return money to the shareholders as dividends, or stock buybacks, and that "religion" was the driver of the demise. Lina Kahn is a convenient scapegoat, but the trajectory was initiated long before when engineering was de-emphasized.
Matt Stoller in his Big newlsetter does a yeoman's job of laying out what really happened, and Amazon wanted it to increase the surveillance footprint of its Sidewalk ecosystem. How Wall [thebignewsletter.com]
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Nothing the Roomba did was non-obvious. They just demonstrated there was a lucrative market for it. China didn't need to copy anything just make their own version that eventually became a superior product.
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Nothing the Roomba did was non-obvious
Well, yeah. They've been depicted in science fiction for at least what? 70+ years. There was an automatic floor sweeper in a 1939 carton Dog Gone Modern. It was more semi-humanoid, but mostly for comedic effect. This predated general purpose computing. So, quite true that IRobot didn't really originate the idea or really have much in the way of any technological special sauce.
Re:Nobody ever learns this lesson (Score:5, Insightful)
The first sentence of this article pretty much tells you why the company went bankrupt. They offered their manufacturing contract to a chinese company, which turned around and use that technology to make competing products, selling it for a much cheaper price. That chinese company still makes a profit because they didn't invest into R&D. iRobot gave them everything they needed. If you go on Amazon and search "automatic vacuum robot" you'll see an ocean of look alike robots made by and shipped from china.
The deal was killed in 2024, highly capable Chinese vacuum robots have been around for far longer than that.
The fact is that Roomba's tech was advanced when they first made it, but that was years ago. By now robot vacuums are generic, and there's a limit to how much of a premium you can demand when doing a generic product.
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They offered their manufacturing contract to a chinese company, which turned around and use that technology to make competing products, selling it for a much cheaper price.
No sorry, this had nothing to do with this. Yes copying from China / Amazon is a risk for businesses, but the reality is iRobot created something unique and clever and then never again innovated or iterated on the design. They were surprised by other companies in the same business long before they made any deals with anyone.
It was a cordless vacuum cleaner attached to wheels with the intelligence of a undergrad university mechatronics engineering assignment (actually that's no fair, what we did at our unive
Wait so Amazon was supposed to kill it? (Score:5, Informative)
Let failing companies go out of business so you can make room for competitors. Don't let large corporations buy brands and then run potential competitors out of business using the brand recognition and they are unlimited resources.
Remember billionaires hate capitalism. Capitalism is competition and billionaires hate competition. So billionaires hate capitalism. And I hate you. You specifically the consumer. Because they hate that they need your money.
The world would be saved with more and more and (Score:1)
More antitrust laws. Whatever the problem the actual solution is always always antitrust law enforcement so we can go back to having competition by very very small honest players like myself with critical thinking and with no capitalist right wing views. Capitalism without competition is just fascism.
Market consolidation and a complete lack of antitrust law enforcement means that if you try to go fast and break things you will either get run out of business or if you're really really lucky a few million buc
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Re: Wait so Amazon was supposed to kill it? (Score:2)
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Nobody wanted lower prices on iRobot appliances. They didn't want iRobot appliances at all! Which is why iRobot went under. Also they're still getting bought out, just not by Amazon. Not an improvement.
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I had a roomba 15 years ago; it was very good. it lasted me about 8 years. I've had a couple replacement since and they were not as good. They crapped out A LOT quicker.
Now they are also a third of the price, so I don't care too much. But an OG roomba at a decent price would be nice.
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Not surprising. The company buying them out has apparently been their contract supplier for awhile now (not sure for how long). That likely coincides with the drop in quality.
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Because they hate that they THINK they need your money.
FTFY
A billionaire literally does not need my money, or any more money, ever, for the rest of their lives. I could live comfortably for the rest of my life on 0.2 billion, and never have to work again.
What a ridiculous take ! (Score:1)
It is the WSJ (Score:2, Troll)
They're up-front about it, and if you're aware of the bias, they're probably the best national paper in terms of factual business reporting. Just skip the editorial page, it consists of almost entirely of indulging the resentments of the geriatric rich.
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iRobot has been circling the drain for years, they why they were desperate to sell to Amazon.
No worries (Score:3)
I am sure that iRobot will be a much better behaved company under Chinese ownership than it would have been under Amazon. /s
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It doesn't matter. It was a loss making company with little R&D or products of value. Chinese alternatives already outclassed iRobot's products in virtually all metrics.
Not every company deserves to survive, much less one that produced a good idea once and then never properly innovated on it. There just hasn't been a compelling reason to buy a Roomba since about a year after it came to the market.
Statement of Objections -- European Commission (Score:3)
the Commission is concerned that Amazon may restrict competition in the European Economic Area (‘EEA')-wide and/or national markets for RVCs, by hampering rival RVC suppliers' ability to effectively compete. In particular, the Commission found that:
* Amazon may have the ability and the incentive to foreclose iRobot's rivals by engaging in several foreclosing strategies aimed at preventing rivals from selling RVCs on Amazon's online marketplace and/or at degrading their access to it.
This may include:
(i) delisting rival RVCs;
(ii) reducing visibility of rival RVCs in both non-paid (i.e., organic) and paid results (i.e., advertisements) displayed in Amazon's marketplace;
(iii) limiting access to certain widgets (e.g. ‘other products you may like') or certain commercially-attractive product labels (e.g. ‘Amazon's choice' or ‘Works With Alexa'); and/or
(iv) directly or indirectly raising the costs of iRobot's rivals to advertise and sell their RVCs on Amazon's marketplace.
Amazon may have the ability to foreclose iRobot's rivals because Amazon's online marketplace is a particularly important channel to sell RVCs in France, Germany, Italy, and Spain. RVC customers in these countries particularly rely on Amazon both in terms of product discovery as well as for their final purchasing decision.
* Amazon may have the incentive to foreclose iRobot's rivals because it may be economically profitable to do so. The merged entity would likely gain more from additional sales of iRobot RVCs, than it would lose from fewer sales of iRobot's rivals and other related products on Amazon. Such gains include benefits from additional data gathered from iRobot's users.
* Such foreclosure strategies could restrict competition in the market for RVCs, leading to higher prices, lower quality, and less innovation for consumers.
https://ec.europa.eu/commissio... [europa.eu]
Repost from an AC some days ago https://hardware.slashdot.org/... [slashdot.org]
No, that's not what killed the Roomba (Score:4, Insightful)
iRobot made some bad technology choices. They were slow to adopt Lidar, which allowed the competition to pass them by. The iRobot app is bloody awful. I have both a Roomba and a 3i and the Roomba is vastly inferior. It's a wonder they held on this long.
well I guess that (Score:2)
Another perspective (Score:2)
The story appears to be more complicated:
Wall Street Ruined the Roomba and Then Blamed Lina Khan [thebignewsletter.com].
Why Picea? (Score:2)
Why isn't anyone blocking the Picea buyout? How is that better?
Fuck the WSJ (Score:2)
In a normal world full of people who could still think critically this kind of story would end a respectable new outlet, especially one such as the Wall Street Journal, whos readership is supposedly a bunch of rich business owners and free market advocates that actually understand how business works.
Gross.
That does make me wonder... (Score:1)