Amazon.com Inc.’s deal to purchase Roomba maker iRobot Corp., which comes hot on the heels of the tech giant’s deal to acquire One Medical health clinics, is sparking more privacy fears.
On Friday before the market open opened, Amazon
announced the agreement to acquire iRobot for $61 per share in an all-cash transaction. The deal is valued at approximately $1.7 billion, including iRobot’s net debt.
The deal comes less than three weeks after Amazon announced a $3.9 billion deal to acquire the direct primary-care company One Medical, operating as 1Life Healthcare Inc.
which itself sparked concerns about data privacy.
Critics were quick to voice privacy fears about the iRobot purchase:
The last thing America and the world needs is “Amazon vacuuming up even more of our personal information,” according to Robert Weissman, president of consumer advocacy organization Public Citizen. “This is not just about Amazon selling another device in its marketplace,” he said, in a statement. “It’s about the company gaining still more intimate details of our lives to gain unfair market advantage and sell us more stuff.
“Amazon just bought iRobot, which has immense amounts of data about people’s physical homes. It never ends. Congress should have passed @TomCottonAR’s bill to bar big tech mergers,” tweeted Matt Stoller, research director at the American Economic Liberties Project.
“With Ring, Alexa and now Roomba, Amazon tracks EVERYTHING that happens inside your house (even who visits you). This is all about getting data on YOU. Google Nest too. Homes were your last data sanctuary as you put your phone down, but not now,” tweeted Raoul Pal, CEO of globalmacroinvestor.com.
“No to this. Amazon has initiated another alarming acquisition — iRobot, maker of the Roomba,” tweeted Stacy Mitchell, co-director at the Institute for Local Self-Reliance, an advocacy organization that fights corporate control. “This is part of a strategy to control the infrastructure of the smart home and gather up a ton of data about our houses and how we live in them.”
MarketWatch contacted Amazon regarding the data privacy concerns:
“Protecting customer data has always been incredibly important to Amazon, and we think we’ve been very good stewards of peoples’ data across all of our businesses,” the company said in a statement emailed to MarketWatch. “Customer trust is something we have worked hard to earn — and work hard to keep — every day.”
The tech giant’s shares are down 1.4% in midday trading Friday, and have declined 15.6% this year. Shares of the S&P 500 index
which are down 0.5% on Friday, have declined 13.3% in 2022.
D.A. Davidson analyst Tom Forte said that the short timespan between the One Medical and iRobot deals could indicate a new strategic emphasis at Amazon.
“While we may be placing too much emphasis on the short distance between the two latest M&A [merger and acquisition] announcements (less than three weeks between One Medical and iRobot), it does suggest to us that CEO Andy Jassy may be more willing to engage in M&A than his predecessor Founder/CEO Jeff Bezos,” he wrote in a research note. “In Mr. Jassy’s defense, we believe he may have to given Amazon’s current size and how it needs a lot more revenue to move than needle than it did when the company was smaller, even 10 years ago.”
D.A. Davidson has a buy rating and $151 price target on Amazon.