Bad policy and poor leadership have consequences.
iRobot is the latest example.
This week, the company behind the Roomba filed for Chapter 11 bankruptcy. Not a liquidation, but the outcome is clear enough: iRobot will now be owned by its Chinese contract manufacturer.
Shareholders are wiped out.
Founders don’t benefit.
Employees don’t benefit.
And America loses another company it once led.
The Deal That Would’ve Ended This Cleanly
In 2022, Amazon agreed to acquire iRobot for roughly $1.7 billion.
It wasn’t speculative. It wasn’t aggressive. It made sense.
iRobot was a mature, capital-intensive hardware company facing brutal global competition. Amazon had the scale, capital, and ecosystem to keep it alive.
Shareholders would’ve exited. Employees would’ve had stability. The brand would’ve stayed U.S. owned.
Instead, Senator Elizabeth Warren pushed the FTC to block the deal. European regulators followed. By January 2024, the acquisition was dead.
What Blocking the Deal Actually Did
The biggest mistake regulators made wasn’t theoretical. It was practical.
They treated time as neutral. It wasn’t.
For iRobot, every quarter without a buyer meant:
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Less cash
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Less R&D
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Worse products
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More share loss
The 18-month regulatory limbo didn’t just delay a transaction. It quietly decided the outcome.
The Collapse Wasn’t Sudden
After the deal was blocked:
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The CEO resigned
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31% of the workforce was laid off
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The stock collapsed
Over the next 18 months:
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Market share continued bleeding to Chinese competitors
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Cash reserves fell below $25 million
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Debt piled up
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Product momentum slowed
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Strategic options disappeared
Eventually, iRobot ran out of leverage. Its largest creditor, its Chinese manufacturer, bought up the debt and took control through bankruptcy.
That’s not competition being preserved. That’s a company being cornered.
The Irony Is Hard to Miss
Regulators said blocking Amazon would:
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Protect competition
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Prevent data misuse
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Limit concentration
Now the company is owned by a Chinese manufacturer that already builds robots for multiple brands.
The IP didn’t disappear. The data concerns didn’t disappear. Competition didn’t improve.
The only thing that changed is who owns the company.
Why iRobot Needed an Exit
This wasn’t about greed or financial engineering.
It was about survival.
When you sell physical products, time is expensive.
Manufacturing doesn’t pause. Inventory doesn’t disappear. Tariffs don’t wait. Competitors don’t slow down.
Once growth slips, you can’t “wait it out.” You either find scale, find a partner, or start shrinking toward failure.
Blocking obvious strategic buyers doesn’t freeze the market. It forces weakened companies to fight alone. And they usually lose.
What Amazon Actually Offered
The Amazon deal wasn’t about Alexa or data.
It was about time.
Amazon offered iRobot four things it no longer had:
Distribution
Lower acquisition costs and protection from copycat brands flooding the market.
Supply chain leverage
Better unit economics and less dependence on a single overseas manufacturer.
Capital
The ability to invest through pressure instead of cutting through it.
Time
Time to fix products, rethink pricing, and compete again.
Without those, iRobot was always running downhill.
This Isn’t an Isolated Outcome
We’ve seen this pattern before.
Spirit Airlines after JetBlue was blocked. Illumina after Grail was forced apart. Giphy after Meta was blocked.
Sometimes companies survive.
But when the target is already weakening, blocking the deal often accelerates failure, not competition.
The End Result
Blocking the Amazon deal didn’t protect consumers. It didn’t preserve competition. It didn’t prevent foreign ownership.
It removed the last viable American buyer.
Now iRobot is bankrupt. Privately owned. And controlled overseas.
Bad policy doesn’t always fail immediately.
Sometimes it just runs out the clock, and lets the market finish the job.
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Eric Carlson is the co-founder of Sweat Pants Agency, the only agency to build two brands from scratch to INC #1 fastest growing in their categories. He leads a team managing over $4M monthly in digital ad spend and delivering 100M+ email sends per month.
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