New Delhi: In a major move to safeguard competition in the interactive product design tools market, the European Commission (EC) has initiated a full-scale investigation into Adobe's proposed acquisition of Figma for a whopping $20 billion. The EC's primary concern is that the deal could potentially diminish competition in the global design software industry, and even exclude rivals from the market.

The investigation, will closely examine two critical areas of concern:

Competition in the Market for Interactive Product Design Tools: Figma, a widely-used cloud-based design platform, boasts an impressive user base, including prominent companies like Microsoft, Coinbase, and Spotify. On the other hand, Adobe is a major player in the design software arena, renowned for its iconic products such as Photoshop, Illustrator, and InDesign. The EC has expressed apprehensions that Adobe's acquisition of Figma could grant the company a dominant position in the interactive product design tools market, leading to potential price hikes and stifling innovation.

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Potential Anticompetitive Bundling Strategies: The EC's second concern revolves around the possibility of Adobe leveraging its market power to bundle Figma with its existing suite of products, like Creative Cloud. This bundling strategy could potentially disadvantage rival providers and create barriers for them to compete effectively in the market.

The European Commission has been granted a 90-working-day period, lasting until December 14, 2023, to thoroughly examine the acquisition deal and its potential ramifications. If the EC deems the acquisition detrimental to healthy competition and consumer welfare, it may reject the deal, requiring Adobe to divest Figma or propose significant alterations to address the identified concerns.

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It is essential to note that the EC's investigation marks the initial phase of the process. The ultimate decision could still result in the approval of the deal, even with accompanying concerns. Nonetheless, the investigation serves as a clear indication that the EC is taking a rigorous approach to evaluating the merger and remains vigilant about preserving a competitive landscape in the industry.

Industry stakeholders and observers will be keenly awaiting the EC's final decision, which could have far-reaching implications for the future of the design software market. The outcome of this investigation will shape the direction of competition and innovation in the interactive product design tools sector, impacting businesses and consumers alike.

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