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The UK will investigate Adobe’s $20 Billion Figma Acquisition

What To Know

  • The regulatory agency expressed concerns regarding the potential negative impact on competition in the screen design software market and has initiated a “phase two”.
  • The UK’s Competition and Markets Authority (CMA) stated that Figma Acquisition has established a significant market share in the screen design software industry, while Adobe has been actively investing in and competing within the same market segment.
  • The CMA, which recently rejected Microsoft’s proposed $75 billion acquisition of Activision, emphasized that the competition between Figma and Adobe has fostered investment in the advancement and innovation of screen design software.
  • Sorcha O’Carroll, the Senior Mergers Director at the CMA, expressed concerns about the potential consequences of the deal, stating, “We are concerned that this Figma Acquisition could hinder innovation and result in higher costs for companies relying on Figma and Adobe’s digital tools, as competition diminishes and the development of new and improved products slows down.

The Competition and Markets Authority (CMA) in the UK has disclosed its intention to conduct a thorough examination of Adobe’s Figma Acquisition (Via The Wall Street Journal). The regulatory agency expressed concerns regarding the potential negative impact on competition in the screen design software market and has initiated a “phase two” investigation.

However, the CMA has granted the companies a five-day window to present legally binding proposals aimed at addressing these concerns. If the proposals fail to satisfy the CMA, the investigation will proceed. Adobe announced its $20 billion Figma Acquisition plan for Figma last year.

The UK’s Competition and Markets Authority (CMA) stated that Figma Acquisition has established a significant market share in the screen design software industry, while Adobe has been actively investing in and competing within the same market segment.

The CMA, which recently rejected Microsoft’s proposed $75 billion acquisition of Activision, emphasized that the competition between Figma and Adobe has fostered investment in the advancement and innovation of screen design software. The CMA expressed concerns that such competition could be compromised if the acquisition deal proceeds.

UK’s Competition and Markets Authority Launches “Phase Two” Investigation into Adobe’s $20 Billion Figma Acquisition

The CMA referred to Figma Acquisition as an “emerging competitive threat” to Adobe, expressing apprehensions regarding the potential decrease in innovation that may result from Adobe acquiring a promising upstart competitor.

The regulatory agency voiced concerns about the possible implications of the acquisition, including higher costs and a potential reduction in the availability of innovative products.

If Adobe’s acquisition of San Francisco-based Figma, which was founded in 2012, goes through, it will mark the largest-ever purchase for the well-established design giant, which has been in operation for 41 years.

Figma, having been on the market for 11 years, has gained significant popularity as a vector-based design tool. This cloud-based software specializes in facilitating remote collaboration and directly competes with Adobe’s XD and Illustrator products.

During the time of the Figma Acquisition, Adobe expressed its intention to integrate features from its Creative Cloud suite into the collaborative software, while also incorporating Figma’s team-oriented features into its core products.

The company presented this as a mutually beneficial outcome for customers, emphasizing its commitment to maintaining Figma’s independence as a separate entity. Furthermore, Adobe assured that there were no plans to alter the pricing structure, including the availability of its free tier.

Sorcha O’Carroll, the Senior Mergers Director at the CMA, expressed concerns about the potential consequences of the deal, stating, “We are concerned that this Figma Acquisition could hinder innovation and result in higher costs for companies relying on Figma and Adobe’s digital tools, as competition diminishes and the development of new and improved products slows down.”

O’Carroll further emphasized that unless Adobe presents viable solutions to address these concerns within the given timeframe, the CMA will proceed with a more extensive investigation.

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