The European Commission has launched an in-depth investigation under the EU Merger Regulation to review the proposed acquisition of Figma by Adobe. The Commission has concerns that the transaction may reduce competition in the global markets for the supply of interactive product design software and for digital asset creation tools.
Adobe is a global software company offering, among others, creative design software tools (e.g. Illustrator and Photoshop) and an interactive product design tool (Adobe XD). Figma is a provider of a web-based collaborative tool for interactive product design (Figma Design) as well as a whiteboarding tool.
The Commission’s preliminary competition concerns
The Commission’s preliminary investigation indicates that the transaction may allow Adobe to restrict competition in the global markets for the:
– Supply of interactive product design tools because:
- Figma is the clear market leader and Adobe one of its largest competitors, Adobe and Figma are close competitors and the transaction would remove an important competitive force, and;
- the unlikely timely and credible entry of other players in the market.
– Supply of digital asset creation tools by:
- eliminating Figma’s current constraining influence over Adobe’s digital asset creation tools, and;
- preventing Figma’s potential growth into an effective competitor to Adobe’s asset creation tools, if the transaction did not go ahead.
In addition, the Commission will investigate whether the transaction may prevent rival providers of interactive product design tools by bundling Figma with Adobe’s Creative Cloud suite.
The Commission will now carry out an in-depth investigation into the effects of the proposed transaction to determine whether its initial competition concerns are confirmed.
The Commission has said that it has closely cooperated with other competition authorities during the in-depth investigation.
The proposed transaction was notified to the Commission on 30 June 2023. The Commission now has until 14 December 2023 to make a decision. It emphasises that the opening of an in-depth inquiry does not prejudge the outcome of the investigation.
The CMA is also investigating the merger and referred it for an in-depth investigation in July 2023.
