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iRobot, the maker of the Roomba vacuum cleaner, filed for bankruptcy protection on Sunday and is pursuing a buyout from its primary manufacturer in China after the company’s acquisition by Amazon was blocked over a year ago on antitrust grounds.
iRobot first raised concerns about its ability to remain in business in March and filed for Chapter 11 bankruptcy protection in a Delaware bankruptcy court on Sunday as it faces competition from lower-priced rivals and new U.S. tariffs. It now plans to go private after its purchase by Picea Robotics, a China-based firm that is its primary manufacturer.
The bankruptcy filing follows the termination of iRobot’s proposed $1.4 billion acquisition by Amazon, which was abandoned in January 2024 amid a probe by the Federal Trade Commission (FTC) – led by Lina Khan – and European regulators. The FTC’s antitrust investigation was focused on Amazon’s ability to favor its own products over its rivals.
iRobot co-founder and former CEO Colin Angle told FOX Business in an interview that the FTC’s decision to oppose the merger struck him as “wrong-minded” and harmful in retrospect.
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“I bet if you asked almost anyone prior to the blocking of the deal with iRobot: Would you rather see iRobot innovating like crazy, coming out with new and better robots for your home, or would you like to see it file for Chapter 11 in the process of being sold to a Chinese manufacturer?” he said. “The wrong thing probably happened.”
Angle, who stepped down from his role as CEO days after the merger was abandoned to allow the company to undergo a major restructuring, pointed to rapidly emerging sectors such as drones and electric vehicles as examples of how U.S. companies may break ground on new industries, but will face challenges from overseas rivals to maintain that leadership.
“America has no divine right to own and lead the industries it begins, only a head start,” Angle said. He explained that dynamic leaves the government facing an important question about its regulatory approach to emerging businesses.
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“Are we going to catalyze the success and try to build it within our borders and allow U.S. companies to grow in their leadership, or do we resent the success of those that we know and prefer to view them as the bad guys in all of this and rather someone else ultimately succeed than the guy that’s my neighbor,” he said.
Angle also said that the FTC blocking mergers and acquisitions (M&A) for reasons that aren’t related to legitimate antitrust concerns can dampen the willingness of innovators to launch new businesses and new products if they’re not confident they can ultimately sell the business for a successful exit.
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“It’s a tragedy for the innovation economy, because every entrepreneur, every investor in a venture is counting on there being an exit, so blocking M&A by big tech for reasons disconnected with monopolistic behavior, has a chilling effect on the certainty that any investor or entrepreneur should feel about selling their company,” he said.
“I think that the bankruptcy filing of iRobot is a very powerful cautionary tale of what happens when the government forgets that their goal is to strengthen the U.S. economy, protect the consumer, and instead allows other motivations to win out,” Angle said.
The surge of investment into artificial intelligence (AI) software and physical AI tools has put the FTC and other regulators in a similar position where they face a choice between facilitating the growth of those industries or inhibiting them.
“Are we going to go and make a series of decisions which make it first, from a regulatory perspective, highly risky to be entrepreneurial in the U.S., and are we going to create policy which disadvantages the development of industry within the U.S., because the tech economy is incredibly mobile,” he added.
Reuters contributed to this report.
