Amazon called off its purchase of robot vacuum maker iRobot on Monday, blaming "undue and disproportionate regulatory hurdles" after the European Union signaled its objection to the deal.

The companies said in joint statement that they were disappointed but mutually agreed to terminate the acquisition. The deal faced antitrust scrutiny on both sides of the Atlantic, but most strongly in Europe, where regulators investigating competition concerns were expected to issue a final decision by Feb. 14.

Amazon announced in 2022 that it would buy iRobot, maker of the circular-shaped Roomba vacuum, for $1.7 billion in cash. But the value of the deal fell 15% after iRobot incurred new debt.

Amazon will pay the Bedford, Massachusetts-based company a previously agreed termination fee of $94 million, iRobot said in a separate announcement, which also disclosed that it would lay off about 31% of its staff and see its CEO depart.

The European Commission, the European Union's executive arm and top antitrust enforcer, had informed Amazon last year of its "preliminary view" that the iRobot acquisition would hurt competition in the industry.

While British antitrust regulators cleared the purchase in June, it also still faced scrutiny in the U.S. by the Federal Trade Commission.

The European Commission did not respond immediately to a request for comment. It had been concerned that Amazon could reduce the visibility of an iRobot competitor's product or limit access to certain labels, such as "Amazon's choice," that may attract more shoppers.

The commission said last year that Amazon also might have found ways to raise the costs of iRobot's rivals to advertise and sell their products on its platform.

David Zapolsky, Amazon's general counsel, lashed out at regulators and said consumers would lose out on "faster innovation and more competitive prices."

"Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren't subject to the same regulatory requirements in fast-moving technology segments like robotics," he said.

He added that "undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition— the very things that regulators say they're trying to protect."

Now that the deal has been called off, iRobot said it would undergo a restructuring plan designed to stabilize the company. As part of those changes, the company will lay off roughly 350 employees.

iRobot Chairman and CEO Colin Angle also will step down. Glen Weinstein, the company's executive vice president and chief legal officer, will serve as interim CEO.

Consumer rights groups had voiced concerns about the Amazon-iRobot deal, saying it would broaden the ecommerce giant's dominance in the smart home market.

Amazon has purchased other smart home companies in the past, including home security camera maker Blink, doorbell camera maker Ring and the mesh-networking Wi-Fi company Eero.

This is the latest example of a deal involving U.S. companies that fell apart after facing scrutiny from European regulators.

Last year, Adobe abandoned its plan to buy online design company Figma for $20 billion because of EU and British antitrust concerns. Biotech giant Illumina was forced to undo its $7.1 billion purchase of cancer-screening company Grail after losing legal battles with antitrust enforcers in both Europe and the U.S.

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