What's Going On With Adobe Stock Friday

Adobe Inc ADBE stock slips after the U.K. regulator recommended its Figma deal for a deeper probe.

The Competition and Markets Authority (CMA) has decided, on the information currently available to it, that it is or may be the case that this merger may likely result in a substantial lessening of competition within the U.K. 

The CMA has identified concerns in the supply of screen design software, where Adobe’s and Figma’s products compete. The CMA found that Figma has established a substantial share of the market for screen design software and that Adobe has been continuously investing in and competing in this segment which could be lost if the deal goes ahead.

The CMA also specified concerns in providing creative design software, where Adobe offers some of the leading tools for image, video, and animation content. 

The CMA’s investigation found that Figma is an emerging competitive threat to Adobe across these tools and that Figma is well-placed to expand its offering and provide an increased constraint to Adobe. This rivalry and innovation are essential to the sector and could be threatened by this deal.

The regulator proposes to refer the merger for a phase 2 investigation unless the parties offer acceptable undertakings to address these competition concerns.

The deal also drew antitrust concerns from the U.S. and EU.

Price Action: ADBE shares traded lower by 0.39% at $481.90 premarket on the last check Friday.