Antitrust panic helped kill an American robotics pioneer
Photo by Mandel NGAN/AFP via Getty Images
That outcome should haunt every regulator who claimed to defend competition. Regulators blocked an American acquisition and ended up delivering a storied American company to a Chinese creditor. They did not preserve a competitor. They helped bury it.
The iRobot collapse exposes a central problem with modern antitrust enforcement: Officials often substitute fear-driven hypotheticals for real-world consequences. They imagine a future in which Amazon squeezes competitors and consumers pay more. They ignore the present in which Chinese firms gain market power, American companies lose ground, and U.S. workers pay the price.
Markets discipline failure quickly. Regulators rarely pay for their mistakes. They can block a deal, watch a company fall apart, and declare victory because they prevented a theoretical harm.
This case produced the opposite of the intended result. Regulators killed a merger that could have strengthened an American company against Chinese competition. They weakened competition in the robot vacuum market by removing one of the few U.S.-based pioneers from the field. They also shrank the number of meaningful paths forward for iRobot until only one remained: a takeover by the company’s Chinese lender and supplier.
Policymakers should learn the right lesson. Antitrust action should not operate as a reflex against size or success. Regulators should measure outcomes, not slogans. If officials claim they protect competition, they should not celebrate decisions that end in bankruptcy and foreign control.
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