Adobe’s ambitious $20 billion bid to acquire cloud-based design platform Figma is set to face a full-scale antitrust investigation by the European Union, following the EU regulators’ preliminary review. The move reflects antitrust watchdogs’ caution towards tech deals where larger companies may acquire smaller start-ups to eliminate competition.
The European Commission had earlier warned about the potential threat this deal poses to competition in the market for interactive product design and whiteboarding software. As a result, the EU competition enforcer is expected to conclude its initial scrutiny by August 7.
According to a Reuters report, an Adobe spokesperson refrained from commenting on the ongoing EU review but expressed optimism about the potential value Adobe and Figma could bring customers by making product design more accessible and efficient. The spokesperson said, “We continue to have productive conversations with regulatory bodies worldwide.”
The acquisition of Figma, a web-based collaborative platform for designs and brainstorming, has been gaining widespread attention due to its popularity among various tech firms, including Zoom Video Communications, Airbnb, and Coinbase. Figma’s innovative approach to product design has made it a favorite among companies looking for user-friendly design solutions.
The proposed deal between Adobe and Figma is part of Adobe’s broader strategy to expand its portfolio and remain competitive in the ever-evolving tech landscape. In recent years, Adobe has made significant acquisitions, including marketing software company Marketo and video editing software company Frame.io.
The investigation into Adobe’s acquisition of Figma marks the latest instance of government resistance against tech giants. Antitrust actions have been witnessed against other major tech players, including Facebook’s parent company Meta and Google.
In May, the European Commission’s Irish Data Protection Commission imposed a record-breaking fine of $1.3 billion on Meta for violating EU privacy rules, highlighting the authorities’ commitment to maintaining data privacy standards. Google has also faced antitrust charges in Europe, and Amazon encountered a significant antitrust lawsuit in the UK.
As the EU gears up for an in-depth investigation of Adobe’s proposed acquisition, regulatory authorities worldwide will closely scrutinize the deal’s potential impact on competition and the broader tech industry.
