(Reuters) -Britain's competition regulator said on Tuesday Photoshop owner Adobe (NASDAQ:ADBE)'s $20 billion buyout of cloud-based designer platform Figma could harm innovation for software used by the vast majority of UK digital designers.
The deal would eliminate competition and remove Figma as a threat to Adobe's flagship Photoshop and Illustrator products, according to findings from an in-depth probe that the Competition and Markets Authority (CMA) launched in July, after Adobe refused to offer concessions to ease its concerns.
"We are reviewing the provisional findings and will reengage with the CMA on the facts and merits of the case," Adobe said in a statement.
The CMA said it was open to consult with interested parties on its provisional findings before making a final decision.
The digital design sector is worth nearly 60 billion pounds to the UK, representing 2.7% of the national economy, and employs more than 850,000 people in highly skilled work, according to the CMA.
The antitrust probe comes amid heightened regulatory scrutiny around the world on Big Tech acquisitions that boost the market power of dominant companies or involve startups seen as nascent rivals.
The EU's competition watchdog had also expressed concerns about the Adobe-Figma deal, announced in September 2022.
Adobe's chief counsel Dana Rao told Reuters earlier this month that the company was open to proposing remedies to resolve regulatory concerns.
"We remain committed to the deal, confident in the facts, and convinced our proposed combination with Adobe is a win for consumers and should be approved," a Figma spokesperson said on Tuesday.
Shares in U.S.-listed Adobe were down 0.6% in premarket trading.