The latest development in the saga of Adobe and Figma was marked when the CMA closed its formal investigation. It will come to a final decision in early 2024, it said.
The Competition and Markets Authority (CMA), the UK regulatory watchdog responsible for ensuring markets remain competitive and fair, has found that Adobe’s plan to purchase Figma could potentially harm the digital design sector.
Margot Daly, chair of the independent group that conducted the investigation into the deal, pointed out that the digital design sector is worth a significant chunk of the UK’s economy – almost £60bn – so she said it was important that the CMA ensures any potential merger would not “adversely affect” the market.
“Adobe and Figma are two of the world’s leading providers of software for app and web designers and our investigation so far has found that they are close competitors,” Daly added. “This proposed deal, therefore, has the potential to impact the UK’s digital design industry by reducing choice, innovation and the development of new competitive products.”
Daly did add that the decision the CMA came to is provisional and it will now consult on its findings before reaching a final decision in early 2024.
The watchdog made its conclusions today (28 November) following an enquiry process that took several months. Back in June of this year, the authority flagged that it would need to conduct an in-depth assessment of the deal.
Its main concerns were that a deal between Adobe and Figma could potentially stifle competition and remove incentives for both companies to innovate. This would in turn harm companies that rely on Figma and Adobe’s digital design tools.
Following the warning that it would look into the nature of the deal, the CMA gave Adobe five working days to address its concerns about competition. In July, however, the watchdog opened a formal investigation into the purchase plan.
Adobe’s ambition to acquire Figma as part of a $20bn deal was first tipped as a possibility in September of 2022. At the time, the bigger company had hoped to close the deal by 2023, but multiple regulators in multiple jurisdictions have raised objections – all on the grounds of competition. The EU began its own in-depth investigation of the deal in August of this year, hot on the heels of the CMA. The deal has also faced scrutiny in the US.
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