UK Casts Doubt On Adobe’s Figma Acquisition

The UK's Competition and Markets Authority has raised concerns about Adobe's plans to acquire Figma, saying the deal could hurt competition....
UK Casts Doubt On Adobe’s Figma Acquisition
Written by Staff
  • The UK’s Competition and Markets Authority has raised concerns about Adobe’s plans to acquire Figma, saying the deal could hurt competition.

    Adobe announced plans to acquire Figma for $20 billion in September 2022. Figma provides web-based design tools that compete with Adobe’s Creative Suite at a fraction of the price. Many users were dismayed with the news, fearing that Adobe would kill off Figma or greatly increase its cost.

    Regulators are looking at the deal, and the CMA has weighed in with some initial concerns:

    The Competition and Markets Authority (CMA) has identified concerns in the supply of screen design software, where Adobe’s and Figma’s products compete. The CMA found that Figma has established a substantial share of the market for screen design software and that Adobe has been continuously investing in and competing in this segment. The CMA found that competition between Figma and Adobe has driven investment in updating and developing screen design software, and this important rivalry could be lost if the deal goes ahead.

    The CMA also identified concerns in the provision of creative design software, where Adobe offers some of the leading tools for image, video, and animation content. The CMA’s investigation found that Figma is an emerging competitive threat to Adobe across these tools, and that Figma is well-placed to expand its offering and provide an increased constraint to Adobe. This rivalry and innovation is important to the sector and could be threatened by this deal.

    The CMA expressed concern that Adobe’s purchase of Figma could result in less competition and higher costs, hurting small businesses and innovation.

    “Products sold by Adobe and Figma are critical for the development of digital services that people and businesses use on a daily basis – be that popular apps and websites selling anything from holidays to streaming the latest movies,” said Sorcha O’Carroll, Senior Mergers Director at the CMA.

    “We’re worried this deal could stifle innovation and lead to higher costs for companies that rely on Figma and Adobe’s digital tools – as they cease to compete to provide customers with new and better products.

    “Unless Adobe can put forward viable solutions to our concerns in the coming days, we will move to a more in-depth investigation.”

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