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AFCA refers examination of Adobe Inc., USA/Figma, Inc. USA merger to European Commission

The following planned merger was notified to the Austrian Federal Competition Authority (AFCA) on 16 December 2022 (Z-6151):

Adobe Inc., USA (“Adobe” or “acquiring party”) plans to acquire the entire issued equity capital of Figma, Inc., USA (“Figma”), thereby also acquiring sole control of it. Upon completion of the planned merger, Figma will become a direct, wholly-owned subsidiary of Adobe.

Both parties offer tools for interactive product design. This includes the design of interactive digital products such as software applications and websites using animated and interactive prototypes, also known as User Interface Design (UI design) or User Experience Design (UX design). Interactive product design requires a collaborative platform on which designers, developers and other interest groups can meet to collaboratively create, release and develop digital products.

Adobe offers a desktop-based interactive product design tool (Adobe XD) while Figma’s web-based collaboration tool for interactive product design (Figma Design) enables several users to collaborate in real time.

AFCA’s concerns

Following a preliminary examination, the proposed merger threatens to significantly affect trade between Member States, for example because the markets concerned are at least EEA-wide in scope, Adobe and Figma are active in all Member States, and the target company Figma has subsidiaries in four Member States.

The plan also raises some competition concerns in these markets, threatening to significantly undermine competition in Austria as a result:

  • Based on the information available so far, there is a real risk that the planned merger will eliminate significant competition pressure from Figma and strengthen Adobe’s market position on a potential market for interactive product design in the EEA and across the world. Various public sources consider Figma to be Adobe’s main competitor and contender in the field of interactive product design. The exact market definition therefore needs to be examined. In addition, volume-based market shares need to be determined as Figma also offers a significant share of its products in a free version.
  • Apart from potential horizontal overlaps, possible conglomerate effects such as bundling or integration of products should also be examined.

Referral to European Commission

Initial findings suggest that the merger seems to be capable, at least in principle, of significantly impairing competition not only in Austria but also in several other Member States. The AFCA therefore considers the European Commission to be the best placed competition authority to examine the planned merger.

It therefore submitted a referral request pursuant to Article 22 of the EU Merger Regulation on 9 January 2023, asking the Commission to review the merger.

Update on 3.3.2023

The European Commission has accepted AFCA’s referral request and will now examine the merger. 13 Member States and 2 EFTA Member States have joined AFCA‘s referral request.