By Foo Yun Chee and Chavi Mehta
(Reuters) -Adobe Inc will need to secure European Union antitrust approval for its $20 billion bid for cloud-based designer platform Figma even though the deal falls short of the EU turnover threshold for a review, EU regulators said on Wednesday.
The move by the European Commission underlines regulators’ worries on Big Tech acquiring smaller innovative rivals and the impact on competition.
The EU competition enforcer said Austria, Belgium, Bulgaria, Cyprus, Czechia, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, and Sweden had asked it to review the deal.
Photoshop maker Adobe had originally sought approval from antitrust agencies in Austria and Germany for the deal. Austria subsequently referred the case to the Commission, prompting the other EU countries to join in.
“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.
The deal will give Adobe ownership of a company whose web-based collaborative platform for designs and brainstorming is widely popular among tech firms including Zoom Video Communications, Airbnb Inc and Coinbase.
Adobe told Reuters the company is engaged in discussions with regulators in the United States, the United Kingdom and the EU, among other regions and expects to close the transaction 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.
(Reporting by Chavi Mehta and Samrhitha Arunasalam in Bengaluru, Foo Yun Chee in Brussels and Akash Sriram in Bengaluru; Editing by Maju Samuel)