The European Union (EU) has resumed its probe into Adobe’s $20 billion acquisition of Figma, a cloud-based designer platform, after pausing it in September to wait for requested information from the companies. The EU’s antitrust regulators are concerned that the deal may remove an important rival to Adobe. They also feel it will restrict competition in global markets for the supply of interactive product design tools. The European Commission (EC) has until February 5, 2024, to decide on the next steps.
Background
Adobe is a software company that provides multimedia and creative software products. Figma is a cloud-based design and prototyping tool that allows multiple designers to collaborate in real-time. Adobe’s acquisition of Figma was announced in June 2022 and was expected to close by the end of 2022. However, the deal has faced regulatory scrutiny in the EU, the US, and the UK.
The EC closed its probe into the deal last month and is waiting for more information from Adobe and Figma. The regulator has received a response and will analyze whether the deal “will weaken competition in the interactive design software market” within the next three months. Adobe will “most likely” have to provide remedies in response to monopoly challenges before regulators can greenlight the deal.
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EU’s concerns
The EU’s primary concern is the potential impact of the deal on the supply of interactive product design tools and digital asset creation tools. The Commission is also probing whether bundling Figma with Adobe’s Creative Cloud suite has the potential to foreclose rival software providers. The EU Commission started assessing the deal in February 2023, following requests from at least sixteen member states. Based on the information provided by those countries, the Commission concluded that the deal threatened to “significantly affect competition in the market for interactive product design and whiteboarding software”.
Adobe’s response
Adobe insists that it wants Figma to operate autonomously and has no meaningful plans to compete in the product design space. In a blog statement, Figma said the collaboration would accelerate its growth by accessing the expertise and resources of Adobe. The company also stressed that Adobe wants the company to continue operating autonomously. Adobe previously said the deal provides a “massive, fast-growing market opportunity”.
Conclusion
The EU’s antitrust regulators have resumed their probe into Adobe’s $20 billion acquisition of Figma. It claims the deal may remove an important rival to Adobe and allow it to restrict competition in global markets. The EC has until February 5, 2024, to decide on the next steps. This might involve demanding remediations to approve the deal, block the merger from going ahead entirely, or give approval. Adobe insists that it wants Figma to operate autonomously and has no meaningful plans to compete in the product design space.
