Adobe Faces Controversy with Figma Deal: Pushing the Boundaries

The UK’s Competition and Markets Authority (CMA) has announced its investigation into the proposed acquisition of Figma by Adobe, adding to the controversy surrounding the merger. The independent regulatory body aims to determine whether the merger would result in a significant reduction of competition within any market in the United Kingdom.

Adobe’s unexpected interest in acquiring Figma, a widely popular web development tool, raised concerns among users and the market alike. The announcement of the $20 billion deal sparked astonishment and uncertainty within the collaboration-driven community. While some individuals and stakeholders have shown support, many adopt a wait-and-see approach, anxiously contemplating the implications of the merger.

This is not the first hurdle encountered by Adobe in its pursuit of Figma. In February 2023, rumours of a potential legal challenge from the US Department of Justice (DoJ) emerged, suggesting ongoing discussions between the parties. Antitrust concerns were raised, prompting Adobe to emphasize its commitment to engaging with regulators worldwide, including those in the US, UK, and EU.

The involvement of the CMA in the investigation comes as no surprise, given the growing scrutiny of tech companies’ activities. With a focus on preserving competitive markets, the CMA aims to evaluate whether the merger would grant Adobe an unfair advantage. The authority’s recent intervention in blocking the Microsoft-Activision merger demonstrates its commitment to scrutinizing market dynamics and preventing the undue concentration of power.

While Adobe should be concerned about the CMA’s investigation, it highlights a broader issue of potential innovation stifling and diminished investment due to stringent regulatory actions. The CMA’s actions have drawn criticism for potentially impeding the growth and development of small, innovative companies. The response from Microsoft, after its failed bid, raised concerns about the UK’s attractiveness for global innovators, suggesting the country may be seen as closed for business.

Both Figma and Adobe have expressed their willingness to engage constructively with regulators during the review process. Figma stated its commitment to ongoing discussions with UK regulators, while Adobe emphasized its cooperation with the DOJ, CMA, and EC to address any concerns and emphasize the positive economic impact the merger could bring.

As the investigation proceeds, the outcome of the Adobe-Figma merger remains uncertain, and the implications for competition and innovation within the industry are being closely watched by stakeholders and observers alike.