Image: © Koshiro/Stock.adobe.com
The CMA said Adobe has five working days to submit solutions to satisfy its concerns about competition and innovation in the design software sector.
The UK’s Competition and Markets Authority (CMA) regulator has today (30 June) announced it may need to enquire into a deal by Adobe to acquire Figma. Adobe first said it planned to purchase web-design platform Figma last September.
It plans to use Figma’s products such as the digital whiteboarding tool FigJam, to expand its collaboration offering to customers. 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.
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, with the CMA being the latest to raise the alarm.
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. It cited competition concerns in the market for design tools. The CMA has today reiterated these worries, with senior mergers director Sorcha O’Carroll saying that the watchdog is “worried this deal could stifle innovation and lead to higher costs for companies that rely on Figma and Adobe’s digital tools – as they cease to compete to provide customers with new and better products.”
“Unless Adobe can put forward viable solutions to our concerns in the coming days, we will move to a more in-depth investigation,” she warned. Adobe has five working days to submit solutions to the CMA’s concerns or the body will progress to a full probe.
The CMA’s statement also said that the merger of both companies could remove incentives for both companies to innovate as a deal between them would remove the element of competition the design industry is currently benefitting from. It claimed that the rivalry between two big companies is important to the sector and other competitors and users could be slapped with higher costs as a result of a merger.
The deal between the two companies has also reportedly faced opposition in the US where they are both headquartered.
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