Britain’s competition regulator on Friday said Photoshop owner Adobe Inc’s $20 billion buyout of cloud-based designer platform Figma may be referred to a deeper investigation as it could “reduce innovation”.
The Competition and Markets Authority (CMA) said unless the parties offer acceptable undertakings to address competition concerns, the deal would be referred to a Phase 2 investigation.
CMA had said in May it was looking into the deal, announced in September last year.
Regulators on both sides of the Atlantic are wary of Big Tech acquiring smaller rivals, especially those with access to big volumes of user data, and tend to demand remedies in return for approving such deals.
The regulator said it found that the deal could lead to lesser choice for designers of digital apps, websites and other products, adding it had identified concerns in the supply of screen design software, where the companies compete.
Adobe adds generative AI features to Photoshop software
“We’re worried this deal could stifle innovation and lead to higher costs for companies that rely on Figma and Adobe’s digital tools,” Sorcha O’Carroll, Senior Mergers Director at the CMA said.
Adobe has five working days to submit proposals to address the regulator’s concerns.
Its U.S-listed shares were down about 1% in premarket trading on Friday.
“Adobe has no meaningful plans to compete in the product design space,” Adobe said in a statement.
“We remain confident in the merits of the case as Figma’s product design is an adjacency to Adobe’s core creative products.”
The CMA most recently blocked U.S. software giant Microsoft’s acquisition of videogame maker Activision Blizzard saying it could hurt competition in the nascent cloud gaming market, sparking a furious row.
“We believe strongly that our proposed combination with Adobe will not result in any reduction of competition in our respective markets,” a Figma spokesperson said.
Comments
Comments are closed for this article.