Although the transaction does not meet the EU profit margin threshold required for an evaluation, Adobe Inc. (ADBE.O) will still have to obtain antitrust authorization from the European Union in order to move forward with its $20 billion contract offer for the cloud-based design company platform Figma, EU regulatory agencies said on Wednesday.
The decision made by the European Commission reflects the concerns of policymakers on the influence on competition that could emerge from technology companies purchasing smaller, more inventive competitors.
The EU organization in charge of implementing the competition act indicated that the countries mentioned have demanded that they examine the contract: Austria, Belgium, Bulgaria, Cyprus, Czechia, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, and Sweden.
Adobe, the company that developed Photoshop, had at one time tried to get the merger allowed by antitrust authorities in Austria and Germany. After then, Austria brought the issue before the Commission, which encouraged some other EU countries to take part in the inquiry.
“The transaction threatens to significantly affect competition in the market for interactive product design and whiteboarding software, which is likely at least EEA (European Economic Area)-wide, and, therefore, in the referring countries,” the Commission said.
“The Commission will now ask Adobe to notify the transaction. Adobe cannot implement the transaction before notifying and obtaining clearance from the Commission,” it said.
As a consequence of the transaction, Adobe will obtain the ownership of a company that provides a web-based collaborative environment for ideas and brainstorming that is exceptionally well-liked among several other technology companies, such as Zoom Video Communications (ZM.O), Airbnb Inc. (ABNB.O), and Coinbase (COIN.O).
Adobe has revealed to Reuters that the firm is currently involved in negotiations with authorities in a variety of locations, including the EU, the United Kingdom, and the United States, and the firm anticipates that the acquisition will be completed this year.
“We look forward to working constructively with the European Commission to address its questions and bring the review to a timely close,” a spokesperson for San Francisco, California-based Figma said.
