The Commission said Adobe’s planned deal could ‘significantly impact competition’ in the market for interactive product design and whiteboarding software.
The European Commission has said Adobe can’t conclude its planned acquisition of Figma until the deal is properly assessed.
The Commission said it has received requests from multiple EU member states – including Ireland – to assess the deal between the two US companies.
Adobe announced last September that it had entered into a merger agreement to acquire the web-based design platform for roughly $20bn in cash and stock. The company plans to leverage Figma’s digital whiteboard products to expand its collaboration offering for teams.
The deal was not initially notified to the Commission as it did not meet the turnover thresholds set out in EU merger regulations.
Instead, Austria and Germany raised the issue with the Commission, over concerns that the deal could impact competition within the European-Economic-Area (EEA).
This was done through an EU provision that allows member states to request a non-EU deal be investigated if it risks affecting trade within the single market.
After Austria and Germany made the notification, 15 more member states joined the referral request.
Adobe previously said it plans to close the transaction sometime in 2023, subject to regulatory approval. By combining Adobe’s creative tools with Figma’s software, the two companies plan to bring designers and developers closer together through collaborative design.
Capabilities from Adobe’s imaging, photography, illustration, video, 3D and font technology will be brought into the Figma platform.
The Commission said the transaction meets the criteria to potentially impact competition within the member states that are part of the referral request. Adobe has been told it can’t implement the deal “before notifying and obtaining clearance” from the Commission.
“In particular, the transaction threatens to significantly affect competition in the market for interactive product design and whiteboarding software, which is likely at least EEA-wide, and, therefore, in the referring countries,” the Commission said.
“The Commission also concluded that it is best placed to examine the potential cross-border effects of the transaction.”
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