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The $20 billion deal will be reviewed at the request of 16 EU member states.

The European Commission has decided that it will “assess” Adobe’s proposed acquisition of Figma, a company that offers a web-based collaborative tool for product design, Figma Design, as well as a whiteboarding tool, FigJam. The California based Adobe first announced the planned $20 billion transaction last November.

The deal in itself does not meet the EU-wide financial size thresholds set by the EU Merger Regulation (EUMR). Accordingly, Adobe did not need to notify and request clearance from the Commission. However, the deal was large enough to meet the national review thresholds in Austria and Germany.

Austria objects and other states follow

Austria submitted a referral request to the Commission pursuant to Article 22(1) of the EUMR. This provision allows Member States to request the Commission to examine a transaction that does not meet the EU trigger level, but affects trade within the single market and “threatens to significantly affect competition within the territory of the Member States making the request”.

Other countries of the European Economic Area (EEA) had the opportunity to join the original referral request. Subsequently, Belgium, Bulgaria, Cyprus, Czechia, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, and Sweden joined Austria’s referral request.

EC will examine “cross-border effects” of the acquisition

On the basis of the information provided by the referring countries, “the Commission considers that the transaction meets the criteria for referral under Article 22 EUMR”, the EC said.

The Commission observed that the transaction “threatens to significantly affect competition in the market for interactive product design and whiteboarding software”. This, they say, is likely to happen “at least EEA-wide, and, therefore, in the referring countries”. The Commission also determined that it is “best placed to examine the potential cross-border effects of the transaction”.

The Commission will now ask Adobe to officially notify them of the transaction. Once Adobe has filed the official EC-level notification, it cannot implement the transaction before obtaining clearance from the Commission.