Last month, a proud American company called iRobot filed for bankruptcy. Worse yet, the company will fall under the control of its largest creditor, a Chinese supplier. Years in the making, this outcome was far from inevitable, and is a prime example of misguided antitrust policies leading to disastrous real-life consequences.
Under the Biden Administration, leftists controlled the levers of government, especially the Federal Trade Commission (FTC). For nearly four years, an agency meant to enforce consumer protection and trade laws was led by Lina Khan, a progressive ideologue who, since Biden left office, has hitched her wagon to avowed socialist Zohran Mamdani, the new mayor of New York City.
Khan’s agenda at the FTC, and now in the Big Apple, was instituting policies that disregard consumer welfare and economic realities in favor of imposing an ideological, progressive worldview on business and individuals.
Nowhere are the devastating and wide-ranging consequences of “Khan-munism” more evident than in the case of iRobot, the Massachusetts-based company known for manufacturing the Roomba robotic vacuum cleaner.
In early 2022, Khan, along with U.S. Sen. Elizabeth Warren (D-MA), whose home state housed iRobot’s headquarters and hundreds of its employees, opposed Amazon’s attempt to acquire iRobot. Unfortunately, her efforts, conducted in concert with her European counterparts, succeeded, as the companies announced that they would abandon their merger due to overzealous government regulators.
Khan’s FTC actually praised the merger’s abandonment, saying “we are pleased that Amazon and iRobot have abandoned their proposed transaction.”
Warren went so far as to release a public letter to Khan calling on the FTC to block approval of the deal. At the time, 350 of iRobot’s Massachusetts-based employees lost their jobs. The situation only deteriorated from there.
What happened to iRobot was entirely preventable, if our regulators and legislators had only looked past the “big-is–automatically-bad” philosophy that has swept through the far left (and, unfortunately, picked up some misguided conservatives as well).
In order for American companies to outpace China (rather than fall into Chinese ownership through bankruptcy), our regulators must work with them, not against them, to ensure that a robust and free market remains the economic bedrock that props up our businesses, our innovators, and our workers alike. The consequences of punitive, ideologically-based overregulation, though evident before, are crystal clear now.
Thankfully, the Trump administration is working to rein in the nonsensical policies of leftists like Khan and Warren that dominated Washington for four long years.
Regulators and legislators alike have pushed back against punitive laws and regulations that almost exclusively target American companies as punishment for their global success, such as the European Union’s Digital Markets Act or Canada’s failed Digital Services Tax.
European regulators, who were crucial to helping Khan scuttle the iRobot deal, are on notice that there is a new sheriff in town. No longer can they malign American companies just as they have spent decades stifling their own innovation sector. Stateside, the FTC is now more focused on consumer welfare and protection, such as its work combatting impersonation scams. Protecting consumers was the commission’s north star for decades before Khan and hopefully, decades to come — though there is still work to be done.
For iRobot, it may be too late. Their co-founder and former CEO Colin Angle said it best in lamenting his company’s demise: “This should never have happened…It’s a particular American tragedy because we did it to ourselves.”
But their tale is a cautionary one for others and for our government regulators. Taking a successful idea and turning it into a thriving business is hard enough. It’s virtually impossible with leftists like Lina Khan using every tool at their disposal to make life harder.
For America to lead the world in the 21st century, our government must empower and support our innovators, not oppose them at every turn. Let’s learn from Lina Khan’s assault on iRobot, not replicate it.
A former chair of the Republican National Committee, Ronna McDaniel is chairman of the Competitiveness Coalition
