Amazon dominates the smart home; now privacy groups oppose iRobot

Since Amazon introduced the Echo smart speaker in 2014, it’s remained the biggest and fastest-growing player in the smart home market. Its most recent expansion includes four new Echo devices, a new Fire TV, two new Ring cameras with features like radar-triggered motion detection, and the Halo Rise contactless bedside sleep tracker that can sense your breathing and movement to determine sleep stages. The new devices were all introduced Wednesday at Amazon’s annual smart home event.

Last month, Amazon made moves to enter a new segment of the smart home, with a $1.7 billion offer to buy iRobot, the maker of the smart Roomba vacuum. Now, the Federal Trade Commission is requesting more information from both iRobot and Amazon before deciding whether to approve the deal.

Earlier this month, 20 privacy and labor groups sent a letter to the FTC asking it to block the acquisition. The letter cited concerns about privacy and Amazon’s growing dominance of the smart home market. 

“Amazon takes its responsibility to customers and privacy incredibly seriously. And if we were to acquire iRobot or any other company, that would not change,” said Leila Rouhi, Amazon’s vice president of Trust and Privacy.

Amazon says 140,000 products are now compatible with Alexa, although “very few” of those are owned by the company. It acquired video doorbell maker Ring for $1 billion in 2018, just three months later it bought security camera maker Blink for $90 million. Then in 2019, it paid $97 million for a mesh Wi-Fi system called Eero to help connect multiple smart devices in the home.

“Eero was a pivotal acquisition because it gave Amazon this ability to see which devices and appliances are being used. They can see the internet traffic that’s going to every connected item in someone’s house. And that gives you a lot of insights. And I’m sure that some of the insight that Amazon got from that was just how popular and how often Roombas are used,” said Stacy Mitchell of the Institute for Local Self-Reliance, one of the advocacy groups that signed the letter to the FTC.

Marja Koopmans, director of Smart Home at Amazon, told CNBC that the data from its devices is only used to improve the capabilities of its interconnected smart home ecosystem.

When Amazon became the first major player to introduce a smart speaker to the market in 2014, the Echo was a runaway success. It sold 5 million devices by the time Google introduced its first smart speaker in 2016. Apple, which has never gained much headway in the smart home space, introduced its first HomePod in 2018.

“We didn’t think about smart home on day one, but we quickly learned from customers that they wanted to use their voice for more than entertainment,” Koopmans said.

Lighting was first, with Amazon adding Alexa activation to an early smart lightbulb,…