I bought a top of the line expensive Roomba years ago and ended up switching to neato a year later, because I would just come home and it would be stuck on something.

In 2022, one cannot go back to the 2010s and repair whatever bad business decisions have been made. So the FTC decisions must then be seen in this light. Therefore, the case made by this article is made in the context that a dominant player in an industry has made decisions that slowly but surely doom them and seeing the imminent doom, they have found an acquirer who might be able to rescue them.

The FTC is operating in a universe conditional on iRobot already having done what they've done. Consequently, even if you can blame iRobot for getting into the situation, you must also blame the FTC for closing off their escape route and de-facto enforcing the sell-off to the Chinese.

As for the other thing about neither the FTC nor the EU actually bringing any proceedings against Amazon or iRobot and simply requesting information: this seems either naïve or a misrepresentation of how governments act to end deals. It's not that convincing to me that organizations that have expressly indicated that they want to break up the big companies are "just asking for information".

One thing I find interesting about Western governments is that they're very similar to the Indian governments that I am familiar with. They employ the same tactics. Every immigrant knows to be rightfully fearful of the white, pink, blue, and yellow slips and the RFE notices they receive. A simple "Request For Evidence". A common strategy back home in India, too.

I suppose the reason those in the West are less aware of these things is that the standard bureaucracy mostly works if you're a domestic W-2 employee. Interactions with the government are few and generally functional. So they come to believe that the government is a highly honest machine: if it asks for X, it does not indicate anything more than a request for X. Those interacting with the more politicised parts of Western government find that they strategically employ the usual tactics that Indian bureaucracies wield routinely at the lowest level.

Overall, therefore, I don't find this convincing. Looking at the other things that Matt Stoller writes, I also suspect there is a partisan slant to this.

0: Businesses are hard. You operate in the fog of war. We could easily be telling a different tale if the bet paid off.

https://www.ftc.gov/news-events/news/press-releases/2024/01/...

In many cases (I suspect this is one of them) there is room for multiple bad guys. Why couldn't the FTC, Roomba Management, Wall Street, China, etc. all be at fault? Seems like it fits the evidence nicely.

>To reverse this strategy, a more assertive antitrust regime is necessary, but it’s not enough. We also have to reduce the many other public levers of support for elevated returns on capital. Only then will it make sense for companies like iRobot to invest in robots instead of share buybacks.

Call your state senators and let them know that enforcing anti-trust legislation and undoing citizens united need to be the primary focus

> In the mid-2010s, during Furman’s tenure running economic policy under Obama, the company sold its defense business, offshored production, and slashed research, a result of pressure from financiers on Wall Street.

> Mesdag engaged in a proxy fight to wrest control of the company from its engineering founders, accusing one of its founders and iRobot Chairman Colin Angle of engaging in “egregious and abusive use of shareholder capital” for investing in research.

Yes Roomba sucks at this point. We get it. Thing is, if you slash research... that's what eventually becomes of your product.

How Lina Khan Killed iRobot

https://www.youtube.com/watch?v=44XYQepBF7g

The patent expiry sealed the deal.

As you know, Khan’s FTC worried it wouldn’t be able to prevent Amazon’s acquisition of iRobot in court, so instead it dragged out approval, which it never granted, while continuously threatening to block.

Simultaneously, her FTC openly worked with the EU to convince the EU to use its more expansive antitrust regime to get the EU to block the deal. That dragged the shot clock for the deal lower and lower (deals have backend dates contractually agreed to, after which the parties no longer are committed to work towards closing the deal and can walk).

Even as the EU was challenging the deal and the shot clock was approaching zero, her FTC was STILL not granting approval and threatened to block and drag it out another year in U.S. courts, all the way until Amazon threw in the towel.

After the deal collapsed, the FTC celebrated and took credit.

The fact iRobot later failed and was sold to Chinese competitors is directly attributable to that block, as it would otherwise be owned and supported by Amazon right now.

Here's the thing: not every company needs to do deep tech innovation, and not every company should.

The financiers were almost certainly correct that iRobot would make more money focusing on selling vacuum cleaners, not developing military/space robots on the side. Building fancy military and space robots is fun and cool, but if it's not producing profit or clearly leading to better consumer products that make money, then it's not the right company to be doing it. Plenty of other companies will do it better -- it makes sense to have one set of companies relying on grants and defense contracts that innovate and that do fundamental research and aren't taking investor money, and another set of companies that take lots of investor money and focus on consumer products without expensive R&D. The idea that they have to be the same companies is silly.

The real story here is not about shutting down R&D -- that makes sense. It's about whether you think the FTC/Lina Khan was right to oppose Amazon acquiring iRobot, and whether they bear any responsibility for what happened after.

I find this article a pretty compelling critique of the extractive incentives of Wall Street and a good argument for government stepping in from time to time to adjust those incentives. Where is the societal good in the engine of capitalism prioritizing short-term extraction over long-term value creation?

Roomba maker goes bankrupt, Chinese owner emerges

https://news.ycombinator.com/item?id=46268854

This question, asked by the person wanting to not put capital into investing further in the company’s lucrative core competency, instead favoring dividends depriving capital and a slow death milking a product facing ever steeper competition.

Capitalism has some awful failure modes, but I’m not sure what system of economics was on display in this case, but it doesn’t look like capitalism. Theft? That seems closer.