Adobe Inc.’s rivals and customers are being quizzed by European Union watchdogs on whether the US software firm could upend fair competition in the interactive product design market after its proposed $20 billion buyout of Figma Inc.
(Bloomberg) — Adobe Inc.’s rivals and customers are being quizzed by European Union watchdogs on whether the US software firm could upend fair competition in the interactive product design market after its proposed $20 billion buyout of Figma Inc.
In questionnaires seen by Bloomberg, the EU seeks feedback on the possible harm that Adobe would cause if it levers its market power to slash the price of Figma’s products or bundles them with its own Creative Cloud offering.
Figma’s use of developer tools into its design software offering — particularly the company’s new “Dev Mode” feature, which allows developers to translate design into code — also features in the EU’s line of questioning.
More broadly, EU regulators examining Adobe’s record buyout also want to know whether the use of artificial intelligence and machine learning technology in product design tools could cause competitive risks in the future. Recipients to the questionnaires were given until Oct. 2 to respond. Such fact-gathering by the EU’s antitrust arm is a standard procedure in complex deals that may pose competition concerns.
San Jose, California-based Adobe didn’t immediately respond to a request for comment out of regular working hours. The European Commission in Brussels declined to comment.
Adobe’s stock fell 0.2% at 9:56 a.m. in New York as the Russell 3000 Index Computer Services Subsector declined.
Adobe’s takeover of Figma is seen as a massive bet that more creative work will be done by small businesses and everyday users on the web, a market that Figma has rapidly seized. While Adobe has introduced less-expensive, streamlined products for that audience, most of its offerings are still heavyweight programs aimed at specialists.
In recent weeks, top officials from Adobe and Figma have flown to Brussels for talks with EU merger enforcers over the proposed deal, as concerns arise over whether the bloc’s merger officials will take a particularly robust stance against the deal.
The EU’s so-called phase 2 review of the deal was announced in August. As part of such investigations, regulators can demand remedies to solve competition concerns but sometimes also decide to give their unconditional approval if initial concerns are shown to be unfounded.
The EU watchdog can also issue a block on the deal if its concerns are not appeased, as it did recently in Booking Holdings Inc.’s €1.6 billion ($1.7 billion) proposed takeover of Sweden’s Etraveli Group.
Adobe also faces scrutiny further afield. The deal is already being vetted by the UK’s competition watchdog and the US Department of Justice.
(Updates with EU response and Adobe shares in 5th paragraph.)
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