The European Commission has informed Adobe of its preliminary view that its proposed acquisition of Figma may reduce competition in the global markets for the supply of interactive product design software and of other creative design software.
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Adobe is a global software company offering, among others, creative design software tools (e.g., Illustrator and Photoshop) and an interactive product design tool (Adobe XD).
Figma is a provider of a web-based collaborative tool for interactive product design (Figma Design) as well as a whiteboarding tool.
Interactive product design software tools are used mainly to design websites, mobile applications, and other digital products. With creative design software, users can create or edit digital assets, such as photos (so-called ‘raster images'), graphic illustrations (so-called ‘vector images') and videos.
On 7 August 2023, the Commission opened an in-depth investigation to assess Adobe's proposed acquisition of Figma and whether the transaction may affect competition in the global markets for the supply of interactive product design software, for vector editing software and for raster editing software.
As a result of this in-depth investigation, the Commission reached the preliminary conclusion that the transaction may significantly reduce competition in the global markets for the:
• Supply of interactive product design tools where Figma is the clear market leader and Adobe one of its largest competitors. The transaction is likely to create a dominant player by combining these market positions.
Furthermore, it will result in the discontinuation of Adobe's own interactive product design tool, Adobe XD, as well as any potential successor product and thus constitute a so-called “reverse killer acquisitionâ€.
• Supply of vector editing tools and supply of raster editing tools, by eliminating Figma as a potential competitor, thereby strengthening Adobe's dominance in these markets. Figma already exerts a significant constraining influence on Adobe's vector editing tool, Adobe Illustrator, as well as on Adobe's raster editing tool, Photoshop.
Moreover, absent the transaction, Figma is significantly likely to enter these markets and grow into an effective competitive force.
The Commission has conducted a wide-ranging investigation to understand the potential impact of the deal.
This investigation has included, among others, analysing internal documents provided by the parties and gathering information and views from competing software providers and customers.
The Commission closely cooperated with other competition authorities during both the initial investigation and the in-depth investigation and will continue such cooperation during the remainder of the in-depth investigation. ■