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The European Commission (EC) has confirmed<\/a> that it\u2019s opening an in-depth investigation into Adobe\u2019s proposed $20 billion bid<\/a> for digital design software rival Figma.<\/p>\n The Commission said that the acquisition \u201cmay reduce competition in the global markets for the supply of interactive product design software and for digital asset creation tools.\u201d<\/p>\n First announced last September, Adobe\u2019s megabucks bid for one of its biggest competitors was always likely to attract scrutiny from regulators around the globe. The U.S. Department of Justice (DoJ) is looking closely at the deal<\/a>, while the U.K. also recently confirmed<\/a> that it is preparing a deeper probe on the basis that the merger would lead to a \u201csubstantial lessening of competition\u201d in the U.K.<\/p>\n Europe, for its part, revealed in February<\/a> that it was looking at the acquisition on competition grounds, so today\u2019s news comes as little surprise.<\/p>\n The crux of the investigation will focus on whether buying Figma will remove one of Adobe major rivals<\/a>\u00a0and impact the broader design software market. The EC points to Figma as the \u201cclear market leader\u201d for interactive product design tools, noting that there is unlikely to be any other \u201ccredible\u201d players entering the market post-acquisition. And while Adobe leads on digital asset creation tools, Figma currently serves as a \u201cconstraining influence\u201d over Adobe. Thus, buying Figma may prevent Figma from continuing its role as an \u201ceffective competitor.\u201d<\/p>\n \u201cAdobe and Figma are two leading providers of software for the creative community in the digital sphere,\u201d said Margrethe Vestager, the EC\u2019s executive vice-president for competition policy, in a statement. \u201cMany users and businesses rely on their digital design tools to excel in their work. With our in-depth investigation we aim to ensure that users continue to have access to a wide pool of digital creative tools among which to choose.\u201d<\/p>\n In truth, the transaction didn\u2019t actually meet the turnover thresholds set out in the EU merger regulations, meaning that the duo weren\u2019t required to notify European regulators. However, Article 22<\/a> of the regulations contains provisions that allow individual EU member countries to refer cases to the EC if they believe a transaction will reduce competition in their own market. And that is what happened here, with more than a dozen constituents referring the acquisition to the EC.<\/p>\n While Europe does have a fairly robust track record of late in terms of investigating Big Tech acquisitions, it has also shown that it\u2019s reluctant to block deals outright. In the past few months it has greenlighted Microsoft\u2019s $68.7 billion Activision acquisition<\/a> and Broadcom\u2019s $61 billion VMware bid<\/a>, albeit with strict caveats and oversight stipulations in place.<\/p>\n So, all is not lost yet for Adobe, but it will likely have to make some kind of assurances and compromises if it wants to get the deal over the line.<\/p>\n The Commission said it plans to make a decision by December 14, 2023 \u2014 roughly one month after the outcome of its investigation into Amazon\u2019s $1.7 billion iRobot acquisition<\/a> will be announced.<\/p>\n<\/p><\/div>\nThresholds<\/h2>\n