The European Union is launching an in-depth antitrust investigation into Adobe’s bid to acquire product design platform Figma, warning that the deal could “reduce competition in the global markets for the supply of interactive product design software and for digital asset creation tools.”

The Commission now has until December 14th to decide on the next steps. These might involve demanding remediations to approve the deal, block the merger from going ahead entirely, or give approval if the EU’s early concerns are shown to be groundless.

In a press release, the European Commission outlined the transaction's potential impact on the supply of interactive product design tools and digital asset creation tools as its primary concern. The Commission will also be investigating if bundling Figma with Adobe’s Creative Cloud suite has the potential to foreclose rival software providers.

Back in February, the Commission said it would assess the acquisition following requests from at least sixteen member states. Based on information provided by those countries, the Commission concluded that the transaction threatened to “significantly affect competition in the market for interactive product design and whiteboarding software.”

Adobe announced that it was acquiring Figma for approximately $20 billion in September last year. If approved, it could surpass the $19 billion that Facebook (now Meta) paid for Whatsapp in 2014. Adobe’s bid drew early criticism not only because Wall Street felt it was wildly overpriced, but also because of the similarity between Adobe’s own product design platform, Adobe XD, and Figma’s more popular service. Adobe started phasing XD out of general availability after announcing the deal, but regulators are concerned that giving Adobe control over one of the few alternatives in the product design software market could stifle competition and innovation.

The merger is also being assessed in the US and the UK, with the latter escalating its investigation to a similar “phase two” probe on July 13th after Adobe and Figma didn’t offer remedies to address antitrust concerns. The UK probe has a longer statutory deadline of December 27th, but it’s anyone’s guess which investigation will conclude first.

Adobe’s expectation of closing the Figma deal in 2023 is still possible, but the odds are stacked against it with the addition of the EU probe.