The UK’s Competition and Markets Authority (CMA) has cast doubt on Adobe’s Figma acquisition, saying it “would likely reduce innovation.”

Figma provides web-based tools that compete with Adobe’s product line at a fraction of the price. Adobe announced in September 2022 that it had reached a deal to purchase Figma for $20 billion. The move was immediately decried by designers and critics as a way for Adobe to kill off a competitor. Regulators in the EU and UK have been investigating the deal to see if it will harm competition.

After reviewing the proposed acquisition, the CMA has issued a preliminary report, finding that the deal would harm the design sector.

Adobe and Figma are two of the world leading providers of software for app and web designers and our investigation so far has found that they are close competitors.

This proposed deal, therefore, has the potential to impact the UK’s digital design industry by reducing choice, innovation and the development of new competitive products.

Today’s decision is provisional, and we will now consult on our findings and listen to any further views before reaching a final decision.

The CMA found that Figma’s existence and competition was fueling innovation at Adobe, innovation that would likely stop post-acquisition:

The inquiry group has also provisionally found that Figma is a credible future competitor to Adobe in image editing and illustration software – and that the threat posed by Figma has driven product development in Adobe’s Photoshop and Illustrator applications, including new web versions. The inquiry group considers that if the deal went ahead, it would eliminate Figma as a competitor which would otherwise have continued to seek to develop its capabilities in image editing and illustration, thereby fuelling innovation and product development by Adobe. This competition would be lost as a result of the transaction, harming designers and creative agencies who might have used these new tools or relied on future updates.

The regulator will make a final decision by February 25, 2024. In the meantime, concerned parties can provide feedback from now till December 19, 2023. The CMA is reserving the right to take whatever action it deems necessary, including blocking the deal entirely.