Adobe needs approval from EU lawmakers to finalize the Figma deal

(Reuters) – Adobe Inc must win European Union antitrust approval for a $20 billion bid for cloud-based design platform Figma, even though the deal falls short of EU revenue estimates, EU regulators said on Wednesday.

The European Commission’s move underscores regulators’ concerns about Big Tech buying up smaller, innovative rivals and its effects on competition.

The EU’s competition watchdog said Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway and Sweden had asked it to review the agreement.

Adobe, the Photoshop manufacturer, had initially sought approval for the agreement from the Austrian and German competition authorities. Austria later referred the case to the Commission, which prompted other EU countries to join the case.

“The transaction threatens to have a significant impact on competition in the market for interactive product design and whiteboard software, which is likely to be at least EEA (European Economic Area) wide and thus also in the reference countries,” the commission said.

“The Commission is now asking Adobe to notify the transaction. Adobe cannot complete the transaction until it has notified and received approval from the Commission,” it said.

The deal will see Adobe own the company, whose web-based collaboration platform for design and brainstorming is widely popular among tech companies including Zoom Video Communications, Airbnb Inc and Coinbase.

“We look forward to working constructively with the European Commission to answer its questions and complete the review,” said a spokeswoman for San Francisco, California-based Figma.

Adobe did not immediately respond to Reuters’ request for comment.

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