Earlier this month, Amazon announced that it was buying the Roomba vacuum maker iRobot. On the surface, this move looks like a massive online retail marketplace acquiring a popular gadget to sell to its loyal shoppers. Roomba is a sparkling consumer product, and iRobot has sold 40 million of them over the past two decades. Shoppers today find them occupying end caps at big retailers such as Costco and Target. The device’s smooth, spinning design has given it a huge chunk of the $3 billion-a-year robot-vacuum market; three quarters of all smart vacuums sold in America bear the Roomba name. In that way, the deal makes sense.
But my suspicion is that, for Amazon, the deal has nothing to do with cleaning your floors. What it seems to be about—expanding the company’s reach further into people’s lives—should trouble everyone.
Amazon’s monopoly power looks like this: Sales on Amazon account for at least half of all online commerce in the U.S. Three out of every four product searches begin on the site. Amazon’s shipping and warehousing service delivers about a quarter of all e-commerce packages in America and is on pace to overtake UPS as the second-largest consumer package-delivery company after the U.S. Postal Service. Amazon Web Services is by far the largest cloud-computing company in the country. Amazon Echo accounts for two-thirds of all smart speakers. This is by no means a complete accounting. Read more…
