Adobe's $20B Figma Acquisition Under Scrutiny: EU Raises Antitrust Concerns

Adobe Inc. ADBE has received a formal antitrust complaint from European Union regulators concerning its proposed $20 billion acquisition of the cloud-based product design platform Figma.

What Happened: The preliminary conclusion of the EU’s investigation, which commenced on Aug. 7, indicates that the impending acquisition could significantly stifle competition in the global supply of interactive product design tools, vector editing tools, and raster editing tools, reported The Verge.

The statement of objections from the EU Commission underscores worries about Figma’s burgeoning dominance over Adobe’s Illustrator and Photoshop editing tools. The statement also highlights the possibility of Figma emerging as a formidable competitor in the vector and raster editing tools market if the merger is not realized.

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However, the final ruling on the proposed merger between Adobe and Figma is slated for February 5th by the European Commission. Both Adobe and Figma can now respond in writing to these objections, propose measures to alleviate the Commission's specific regulatory apprehensions, and request a hearing.

Despite these regulatory hurdles, both Adobe and Figma continue to express confidence in their case. Interestingly, neither company has proposed any solutions to address the antitrust concerns triggered by the investigation.

Concurrently, Adobe’s regulatory issues are becoming more widespread, with similar probes in the UK and a potential antitrust lawsuit drafted by the US Justice Department.

Why It Matters: The antitrust complaint is a significant setback for Adobe’s acquisition plans. As noted by the European Commission, Figma’s rapid growth could make it a strong competitor to Adobe’s editing tools in the absence of the merger.

This scenario could reshape the global design and editing tools market, presenting new challenges and opportunities. Furthermore, the ongoing investigations in the UK and potential lawsuits in the US underscore the increasing scrutiny of tech acquisitions globally, with potential implications for future mergers and acquisitions in the sector.

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