iRobot Founder Says FTC Treated Blocked Deals 'Like Trophies' as Bankruptcy Follows Failed Amazon Acquisition (techcrunch.com) 54
Colin Angle, the founder of iRobot who built the company from his living room over 35 years and sold more than 50 million Roomba vacuums, watched his creation file for Chapter 11 bankruptcy earlier this month after what he describes as an "avoidable" regulatory ordeal that killed Amazon's $1.7 billion acquisition bid. In an interview with TechCrunch, Angle recounted the 18-month investigation by the FTC and European regulators that preceded Amazon's January 2024 decision to abandon the deal. The process consumed over 100,000 documents and a significant portion of iRobot's discretionary earnings. Angle said the deal should have taken "three, four weeks of investigation" given iRobot's declining market position -- 12% and falling in Europe, where the leading competitor was only three years old.
During his deposition, Angle said he walked the halls of the FTC and noticed examiners had "printouts of deals blocked, like trophies" on their office doors. He entered the process "looking for a friend" and instead encountered the question: "Why should we ever let them do this?"
Further reading: WSJ Editorial Board Says Lina Khan Killed iRobot.
During his deposition, Angle said he walked the halls of the FTC and noticed examiners had "printouts of deals blocked, like trophies" on their office doors. He entered the process "looking for a friend" and instead encountered the question: "Why should we ever let them do this?"
Further reading: WSJ Editorial Board Says Lina Khan Killed iRobot.
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Is this better for consumers though? If the goal was to ensure healthy competition in the marketplace it seems like that goal has not been achieved through the demise of iRobot. Consumers have less choices than they did before.
Re:tl;dr (Score:5, Insightful)
The regulators weren't going to block the deal because they wanted iRobot to die, nor because they wanted it to remain in Collin Angle's hands. They were going to block the deal because they didn't want Amazon to have it. The concern was that Amazon's position of being both a producer AND owner of a global marketplace would put them in a position of too much economic power.
Further, the FTC did not eliminate a choice for consumers. iRobot was already losing to the competition. This bid to be bought was a last-chance effort at putting the product in the hands of a better owner who might be able to make it competitive again.
The FTC didn't drive the business to bankruptcy. Collin Angle did.
So the only consumer benefit here is that Amazon is still just a marketplace administrator, and not also a producer, of at least one consumer product.
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agree. commenting to fix my fat finger mod
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See the above post by Brain-Fu which already answers this. The government's concern was not that iRobot was succeeding or failing. It wasn't that they were or weren't abusing a market. Their concern was what would happen if Amazon, a notorious serial market abuser, got their hands on it. They were absolutely right to be worried about that. If a different company had been buying iRobot, they would probably have been fine with it.
If the FTC wants to block a deal, the FTC should sue to stop it in court, and the court should make a decision.
The law says otherwise.
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The regulators weren't going to block the deal because they wanted iRobot to die, nor because they wanted it to remain in Collin Angle's hands. They were going to block the deal because they didn't want Amazon to have it. The concern was that Amazon's position of being both a producer AND owner of a global marketplace would put them in a position of too much economic power.
Indeed.
During his deposition, Angle said he walked the halls of the FTC and noticed examiners had "printouts of deals blocked, like trophies" on their office doors. He entered the process "looking for a friend" and instead encountered the question: "Why should we ever let them do this?"
And it was Angle's job to convince them why they should let this happen, not just expect they would because it would be good ($$$) for him and/or his company. Regulators aren't there to be "your friend" they're their to (hopefully) look out for what's best for the rest of us.
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The regulators...were going to block the deal because they didn't want Amazon to have it. The concern was that Amazon's position of being both a producer AND owner of a global marketplace would put them in a position of too much economic power.
Further, the FTC did not eliminate a choice for consumers. iRobot was already losing to the competition.
Y'see, that's the infuriating bit. Either iRobot was in a strong position and merging with Amazon would make it even stronger, or it was getting crushed by competition. You can't have it both ways. I think history is now showing it was the latter case, something which was obvious at the time.
As others have mentioned, I think it was all about "Amazon big, must keep from getting bigger". Amazon could have tried buying a kid's lemonade stand and Kahn would have blocked it. All the investigations and informatio
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https://github.com/Hypfer/Vale... [github.com]
Maybe if iRobot really pushed privacy and keeping data in your home as part of their marketing, they would have had a solid hook. They weren't really offering and innovating though. Their gutter cleaner ended up being a failure.
They are trophies (Score:5, Insightful)
Put me in charge and we'll go back to 1 TV station per owner, cable companies can't own TV stations, movie studios can't be streamers, and cats and dogs will learn to live together.
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Put me in charge and we'll go back to 1 TV station per owner, cable companies can't own TV stations
IOW undoing the works of Bill Clinton.
If only more people understood how the TCA led to the rise of Faux News we might have some clarity.
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Every law should go under some sort of adversarial review. Even the most beneficial sounding law can have major unintended consequences or well-disguised intended ones. I do think that nationwide cell networks would not have been what they are today (in a good way) without TCA, but that's partly because we wouldn't have done any other regulation to create the roaming cooperation that would be needed.
Re:They are trophies (Score:4, Interesting)
Perhaps you hilarious people should start by kaking it illegal to put more than one topic in a single bill.
The "Save the beaver" act that makes it illegal to hunt beavers in one specific area, one square mile large... And at the same time shovels 100b dollars to the army, another 50b to the CIA, allows them to put cameras in ladies' rooms while at the same time removing anti insider trading laws.
Before you can't get done, don't even presume to be able to make a proper country out of that circus.
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I support this idea but it's not trivial to implement, some bills are big and cover a lot of related area for legitimate reasons (whether they have bullshit tacked on or not.)
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Most other countries manage it, why not the US?
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I support this idea but it's not trivial to implement
Most democratic countries in the world have laws against bills of appropriation dealing with anything other than the specific appropriation in their constitution or other legal frameworks.
You don't need to think about this, literally just copy it from someone who has a working functioning democracy. There are plenty of examples. E.g. France, Netherlands, or hell Australia if you are worried about translation errors from foreign languages.
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FTFY. That was the same year that we got the DMCA - politicians were very busy that year creating legislation that would fuck us for decades.
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And Clinton was happy to sign it. You don't just sign bad laws, you send them back and make the opposition pass it over your head if they have the will.
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A CEO (Score:2)
He entered the process "looking for a friend"
A CEO was looking for a friend?
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A CEO was looking for a friend?
I thought rich people like that had people that can "find a friend" for them. That way they avoid Solicitation of Prostitution charges.
amazon could not have save them (Score:2, Insightful)
iRobot was already doomed at that point, Chinese bots were doing what they did better and cheaper, what the fuck was amazon going to do to change that? Lay off the engineering team and source parts from china, that's what. Their only value to amazon was as an empty brand, they were dead as an innovator either way.
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Amazon already does a lot with robotics in their warehouses. It's possible they wanted to buy just the brand name. It's also possible that it was worth it for some patent that should have never been granted. They do have a habit of buying up home automation companies and just doing very little with it. They have two brands that both have doorbells and security camera (Blink and Ring) and they don't even work together.
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long teeth (Score:5, Informative)
Irobot was built on 1980 technology. At the time, it was state of the art. The Chinese are not stupid. Its heyday ended quite a while ago.
for fuck's sake (Score:4, Insightful)
The question in antitrust is not "our company is failing and it would be super cool for our investors and our executives if Big Tech would buy us out." The reason antitrust regulators rejected this buyout was that Amazon would (based on their decades of past behavior) start to favor iRobot's crappy Chinese robots over all the other crappy Chinese robots who depend on Amazon as their primary method of distribution. This would be bad for consumers and the marketplace in general, for obvious reasons. And the purchase price by Amazon represented what it would earn from squeezing out competition in this way.
If iRobot didn't want to be put in this situation maybe Mr. Angle should have managed his business better such that Amazon would not be looking to buy the brand to whitelabel Chinese robots.
The fact that a handful of people (whoever is left at iRobot to whitelabel Chinese robots) will lose their jobs is his fault and ultimately of less importance than the damage to consumers and the market in general.
Politics gets in way... (Score:3)
In theory, antitrust is enforcement on mergers is crucial to prevent damaging monopolies. In practice, we still end up with companies exerting monopoly power.
The problem with antitrust enforcement is that it becomes entirely political. There are only a few dozen transactions a year that might theoretically create serious antitrust concerns. Which ones get looked at/shut down seems to be more dependent on who is in the white house and the political connections at the companies involved than the merits of the transactions. Worse, it seems that antitrust has recently been used as a cudgel for corruption and censorship (especially for media companies) where antitrust approval can hinge on whether a company has devoted sufficiently obsequious coverage to the administration or donated to a pet project like a certain ballroom.
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They aren't, but in practice it's pretty difficult to have a monopoly on a large/important industry without engaging in abusive practices.
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They aren't, but in practice it's pretty difficult to have a monopoly on a large/important industry without engaging in abusive practices.
I dunno. I've worked at a number of companies which were dominant in one market or other. Maybe I'm just lucky but I never heard a whisper of any of them abusing customers. In fact, all of them has corporate goals which essentially said "play hard, play to win, and play fair".
Business was done, let them die. (Score:2)
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First, a corporation should be created and end as it's own entity; mergers and acquisitions should not be a thing between corporations.
I'm curious: why do you think that? It's very impractical and inefficient.
You may want to check out Ronald Coase's The Nature of the Firm [wikipedia.org] for a groundbreaking work explaining why firms exist rather than collections of individuals contracting with each other. The short answer is you avoid enormous transaction costs and frictions by banding as a company.
From a rights perspective, a company is just a group of people who pool resources to cooperatively produce products. Why would you think it reasonable to prev
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I think that because the eventual end game of the current situation is one giant global company. And no one else. It reduces any one corporations's power and allows competition which is stamped out by merging to be bigger than someone else.
I'm sure every greedy businessperson wants this. But that's the interesting point, you can't actually achieve that, just like all children can't be above average. As soon as a company tries to exercise market power, they open the door for competitors to arise. The bright sparks in Econ can show how it's impossible for any one company to swat down every single competitor which pops up.
And practically speaking, it would be virtually impossible to achieve. There are lots of greedy business people who want to r
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Species composed of individuals are successful because each individual is limited in life or scope, and the
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Allowing it to its core activity at its own pleasure allows it to shift to the most profitable activity. This is a problem when they grow unduly large....but that is why monopoly laws and legal controls exist.
That's the thing we observe: unassailable titans of industry get disrupted all the time. Just look at the list of companies on the DJIA 50 years ago versus today: the lists are almost entirely different.
Here's the thing I don't understand about your argument though. Do you think large, old companies are super efficient or very badly run? You assert they focus on the most profitable opportunities, which means they'd have to limit their expansion, and that they grow unduly large, which implies they're doing t
Regulations (Score:2)
There are 3 types of regulations:
1) Evil: These consist of regulations designed to protect businesses (make them profitable), appearance, or to hurt 'enemies' of the current political ruler. Licenses for cosmeticians/barbers, lawn neatness, requiring cars be sold by a local dealer, or outlawing certain religions from an area.
2) Safety: Stopping deaths/injuries. Seatbelts, anti-lead rules, etc.
3) Ethical: To prevent unethical business practices including but not limited to: anti-discrimination rules, tru
Here's the thing... (Score:4, Insightful)
I'm not stating an opinion on whether this merger would have resulted in some form of monopoly. It may have, but Amazon could easily spin up its own robotic vacuum company if they wanted to. Either way, the result is that iRobot is now owned by a foreign company. So, what exactly was solved by blocking this merger other than the shareholders (private I think) of iRobot got screwed?
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Yeah, good thing we have a random Chinese company listening to us instead of Amazon
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Yeah, good thing we have a random Chinese company listening to us instead of Amazon
Random Chinese company much less likely to share their recon with domestic government agents.
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Lol. https://en.wikipedia.org/wiki/... [wikipedia.org]
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Yeah, good thing we have a random Chinese company listening to us instead of Amazon
Yes it is, because it is a different random company which means you as the consumer has more choice on the market, rather than Amazon driving out all competition and you getting fucked by the only Amazon robot vacuum cleaner remaining on the market.
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The robot vacuum market doesn't affect my bottom line. The idea of maybe theoretically paying more for my next robot vacuum doesn't affect me. I'll still use Amazon because it makes my life easier.
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Of course. But these days companies often don't buy other companies for the technology - instead, they buy them for the brand recognition and captive userbase.
"Why should we ever let them do this?" (Score:2)
It's their job! Their job is to prevent monopolies (in fairness, they haven't been doing too good a job of late in that department) so the consumer (i.e. you and me) don't pay exorbitant prices for products and services because there are only one or two providers.
What he wanted was for the government to roll over and let things go through since clearly the company was not able to compete in the free market. He wanted someone who could manipulate people's purchases by not showing competing products to take
Re:"Why should we ever let them do this?" (Score:5, Interesting)
It's their job! Their job is to prevent monopolies
IANAL but no, I don't think that's the FTCs charter. Up until the Kahn era, their goal was to promote consumer welfare. If a merger was likely to reduce prices through efficiencies, that is supposed to be approved. Monopolies are not, in fact, illegal or prohibited by any regulation.
(Side note: monopolies are also extremely rare in a free market. Even rarer is a company being able to use market power to charge "excessive" prices, however you might define that. There's economic research and theory explaining why this isn't actually possible. The gist is even the possibility of competition is enough to prevent monopolists from raising prices. Monopolies protected by legislation, e.g. cable companies and labor unions, are another story.)
In practice, that's very hard to determine a priori. I think antitrust regulation and enforcement is doomed to turn into allowing mergers for politically influential companies and denying them for companies who are out of favor. TBH, I think that's how antitrust regulation has behaved when the ink was still drying on the Sherman Anti-trust Act
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It's their job! Their job is to prevent monopolies
IANAL but no, I don't think that's the FTCs charter. Up until the Kahn era, their goal was to promote consumer welfare. If a merger was likely to reduce prices through efficiencies, that is supposed to be approved. Monopolies are not, in fact, illegal or prohibited by any regulation.
(Side note: monopolies are also extremely rare in a free market. Even rarer is a company being able to use market power to charge "excessive" prices, however you might define that. There's economic research and theory explaining why this isn't actually possible. The gist is even the possibility of competition is enough to prevent monopolists from raising prices. Monopolies protected by legislation, e.g. cable companies and labor unions, are another story.)
In practice, that's very hard to determine a priori. I think antitrust regulation and enforcement is doomed to turn into allowing mergers for politically influential companies and denying them for companies who are out of favor. TBH, I think that's how antitrust regulation has behaved when the ink was still drying on the Sherman Anti-trust Act
The FTC's charter pretty much nails down all of that as their purview. Shit if you click into the competition link in their charter, they have an extensive set of explanations and prior court cases explaining why the Sherman Anti-Trust Act and the Clayton Act would apply in a situation like this.
Matt Stoller's take (Score:4, Informative)
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