Image: © Mat Hayward/Stock.adobe.com
The CMA is concerned that the deal will reduce competition in the UK, while the deal faces looming threats from EU and US regulators.
Adobe’s plans to acquire design software company Figma is facing another threat, as a UK watchdog has begun an in-depth investigation into the deal.
The UK’s Competition and Markets Authority (CMA) confirmed today (13 July) that it has begun a phase two investigation into the proposed merger, due to concerns that the deal will reduce the competition within UK markets.
Last month, the regulator asked Adobe to submit solutions that could alleviate concerns about competition and innovation in the design software sector.
In its latest decision, the CMA said the two companies “said they would not offer such undertakings”. The statutory deadline for the CMA’s decision is 27 December 2023.
Figma is a fast-growing company whose backers include Andreessen Horowitz. It raised $50m in Series D funding in a round led by the VC firm in 2020.
Last September, Adobe revealed its plans to purchase Figma for $20bn, in order to use its various products to expand its collaboration offering to customers.
At the time Adobe announced its acquisition of Figma, the deal was forecast to close in 2023 subject to regulatory approvals. However, the deal has been hit with suspicion from several authorities.
The CMA has shared concerns that the deal could remove incentives for both companies to innovate, as a deal between them would remove the element of competition that the design industry is currently benefitting from.
Earlier this year, the European Commission warned that Adobe would not be able to go through with its acquisition until the deal is properly assessed. The commission also cited competition concerns in the market for design tools. EU regulators will decide by 7 August whether they will clear the deal to go ahead, Reuters reports.
The deal between the two companies has also reportedly faced opposition in the US where they are both headquartered.
Meanwhile, the CMA is currently negotiating with Microsoft to find a way to approve the company’s acquisition of gaming giant Activision-Blizzard. In April, the CMA blocked the $69bn deal from going ahead, due to concerns that it would stifle innovation and choice in cloud gaming.
This deal also faced a threat from US regulators, but a judge recently ruled in Microsoft’s favour. The EU also gave the green light for this deal to go ahead.
Regulatory threats still loom over this deal however, as it is understood the US Federal Trade Commission plans to appeal this court decision.
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