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The United Kingdom’s Competition and Markets Authority (CMA) has expressed provisional concerns about Adobe’s planned $20 billion acquisition of collaboration software firm Figma. The regulator, after an in-depth Phase 2 investigation, provisionally concluded that the deal could negatively impact innovation in software widely used by the majority of U.K. digital designers.
In its statement on Tuesday, the CMA suggested that the acquisition might eliminate competition between the two main players in product-design software, potentially stifling innovation and hindering the development of new competitive products. The deal could also remove Figma as a competitor to Adobe’s flagship products, Photoshop and Illustrator.
An Adobe spokesperson responded to the findings, stating, “We are disappointed in the CMA’s findings and disagree with the CMA’s perspective on this transaction. Adobe and Figma will deliver significant value to customers. We are reviewing the provisional findings and will reengage with the CMA on the facts and merits of the case.”
Figma also expressed disappointment and disagreement with the CMA’s provisional findings. A spokesperson for Figma emphasized that they remain committed to the deal, asserting confidence in the facts and belief that the proposed combination with Adobe benefits consumers and should be approved.
The CMA noted that the acquisition would eliminate competition in three software markets: product design, image editing, and illustration. The U.K.’s digital design sector, valued at nearly £60 billion ($75.76 billion), approximately 2.7% of the country’s economy, heavily relies on Adobe and Figma software.
Margot Daly, chair of the independent group conducting the investigation, stated, “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. This proposed deal, therefore, has the potential to impact the U.K.’s digital design industry by reducing choice, innovation, and the development of new competitive products.”
The CMA plans to consult on its findings, inviting responses from interested parties until December 19, before making a final decision.
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