Britain's competition watchdog said on Wednesday it was looking into Adobe Inc's $20 billion buyout deal for cloud-based designer platform Figma to find if it could lead to "substantial lessening of competition" in the country.

The move underlines regulators' worries that large tech firms acquiring smaller innovative rivals could throttle competition.

UK Competition and Markets Authority (CMA) last week blocked U.S. software giant Microsoft's $69 billion acquisition of "Call of Duty" maker Activision Blizzard over concerns it would hinder cloud gaming.

CMA said it has set June 30 as the deadline for its phase 1 decision on the the Adobe-Figma deal.

"We look forward to continuing to engage with the DOJ (U.S. Department of Justice), CMA and EC (European Commission) in productive discussions about the businesses, markets and positive economic impacts this deal will bring as they conduct their reviews," Adobe said.

Figma said it would "continue to engage constructively with regulators in the UK".

Adobe in September announced a cash-and-stock deal for Figma, the biggest buyout of a privately owned software startup, whose web-based collaborative platform for designs and brainstorming is widely popular among tech firms including Zoom Video Communications, Airbnb Inc and Coinbase.

The company said in March it was working with the DOJ on clearing the deal and expected it to close by the end of 2023.

(Reporting by Radhika Anilkumar and Eva Mathews in Bengaluru;Editing by Nivedita Bhattacharjee)