Adobe’s Figma Acquisition Faces Hurdle as UK Regulator Raises Competition Concerns
In September of the previous year, Adobe announced its intention to acquire the online design collaboration platform Figma for an equivalent sum of 20 billion dollars. However, this transaction came under scrutiny by the United Kingdom’s Competition and Markets Authority (CMA) in June of this year. The preliminary findings of their investigation raised concerns that the deal might adversely affect market competition and potentially curtail opportunities for innovation.
Figma, which has secured approximately 80% of the design market share, is also intertwined with the 19.4 billion dollar industry of design-related application services. The UK’s Competition and Markets Authority fears that if Figma does not merge with Adobe, it could continue to develop software services that compete with Adobe, suggesting that Adobe’s acquisition of Figma might lead to a market imbalance.
Given the significance of the design-related industry in the UK, which garners an annual revenue of around 60 billion dollars and employs approximately 850,000 technical professionals, the Authority is further investigating whether Adobe’s transaction could impact economic development within the UK.
The UK Competition and Markets Authority has not yet issued a final judgment and plans to solicit further opinions while evaluating Adobe’s response to these concerns.
Adobe has emphasized that its market focus differs significantly from Figma’s. Adobe highlighted that Figma concentrates on building web collaboration platforms and interactive products, while Adobe itself is focused on creative tool products. Adobe also stated its intention to cooperate with regulatory authorities, hoping to successfully complete this acquisition within the year.
Besides the UK’s Competition and Markets Authority, the European Union and the United States Department of Justice have also initiated investigations into Adobe’s proposed acquisition. They express concerns that Adobe’s acquisition of Figma might limit the platform choices for many professional designers, potentially increase the usage of Adobe’s services substantially, and create unfair competitive conditions for other creative platforms and tool providers.
