Adobe Inc. officials are rushing to finish a proposal to address concerns from European competition regulators who are threatening to block the company’s record $20 billion acquisition of Figma Inc., according to people familiar with the process.

The initial offer may include a commitment not to tie Figma into Adobe’s Creative Cloud package, a bundle of the company’s products, and a potential divestment of Adobe XD, which competes with Figma, said the people, who asked not to be identified because the negotiations are confidential. Lawyers and executives from both companies are preparing to fly to Brussels for Dec. 8 meetings with the European Union to discuss the proposal.

The deal, which would preserve Adobe’s top spot in the creative software market, is under threat from regulators in both the EU and UK, who have said that the planned tie up could harm competition. US regulators, who have also been reviewing the deal for more than a year, have yet to reach a final decision on whether to try to block it.

It may be hard, however, for San Jose, California-based Adobe to win over regulators, who are still smarting from not wresting more concessions in reviews of deals involving tech giants like Alphabet Inc. and Meta Platforms Inc., according to Bloomberg Intelligence analyst Jennifer Rie. The watchdogs have expressed concerns in a number of recent mergers about the effects on future innovation.

“They are really watching for that because it was missed” previously, she said. And the UK “didn’t cave” on Microsoft Corp.’s $69 billion purchase of Activision Blizzard Inc. “until after a structural remedy offer.”

Adobe didn’t immediately respond to requests for comment. San Francisco-based Figma pointed to the statement it issued Tuesday after a UK regulator said the deal would imperil competition in product design software and reduce the development of new products.

“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,” Figma said.

The UK’s cloud computing market is to face a competition probe over concerns it is being dominated by Amazon and Microsoft.

Media watchdog Ofcom said the two make up 70-80% of the sector in the UK, while closest rival Google has 5-10%.

Ofcom had said in April it was worried a lack of competition made it difficult for businesses to switch providers.

It has referred the sector to the UK’s Competition and Markets Authority (CMA) to look into the issue.

Cloud computing broadly refers to the storage of data online that can be accessed anywhere at any time.

The services are used by businesses across the UK, and Ofcom estimated that in 2022 the cloud services market in the UK was worth up to £7.5bn.

“Many businesses now completely rely on cloud services, making effective competition in this market essential,” said CMA chief executive Sarah Cardell.

“Strong competition ensures a level playing field so that market power doesn’t end up in the hands of a few players – unlocking the full potential of these rapidly evolving digital markets so that people, businesses, and the UK economy can get the maximum benefits.

“The CMA’s independent inquiry group will now carry out an investigation to determine whether competition in this market is working well and if not, what action should be taken to address any issues it finds.”

The CMA said it would conclude its investigation by April 2025.

“All credit to Ofcom for addressing the anti-competitive issues such as data egress fees, technical and commercial lock-ins that have damaged and distorted the UK’s growing cloud infrastructure market for too long,” said Nicky Stewart, former head of ICT at the Cabinet Office.

“It’s imperative that the CMA thoroughly investigates all the deep-seated issues in this critical market which underpins so much of our nation’s digital infrastructure – and that includes anti-competitive licensing.”