UK CMA Provisionally Rules Against Adobe’s Figma Acquisition

The UK Competition and Markets Authority today said that it has provisionally found Adobe’s $20 billion Figma acquisition to be anti-competitive. It is now seeking feedback from concerned parties and will issue a final ruling by the end of February.

“The digital design sector is worth nearly £60 billion to the UK–representing 2.7 percent of the national economy–and employs over 850,000 people in highly skilled work,” Margot Daly, the chairperson of the independent group that’s conducting the CMA investigation said. “The software this sector uses is pivotal to its success, so the CMA has from the outset been very focused on ensuring this merger doesn’t adversely affect such an important part of the UK economy. This proposed deal has the potential to impact the UK’s digital design industry by reducing choice, innovation, and the development of new competitive products.”

According to the CMA, while Figma currently competes with a single Adobe product, XD, the firm could emerge as a “credible” competitor to Adobe’s dominant image editing and illustration software. Adobe purchasing Figma eliminates the competition, the CMA notes, adding that Adobe abandoned the development of a new product that might have competed with Figma even more closely than does XD today.

Adobe announced that it would acquire the collaborative design tool Figma for $20 billion in September 2022, but it then got caught up in the AI excitement of 2023 and completely ignored Figma at its recent Adobe MAX conference. But this is also the second time this week that a European regulator has belatedly weighed in on a 2022 Big Tech acquisition: The EU announced yesterday that it provisionally opposed Amazon’s $1.7 billion acquisition of iRobot; that deal was first announced in August 2022.

The CMA doesn’t appear to be working with Adobe on a resolution per se, as the European Commission is with Amazon. But it says that it will “consult” with others on possible remedies, “which could include blocking the deal outright.” It is seeking feedback on the deal from outsiders through December 19, and it will issue a final ruling by February 25, 2024. You can find out more here.