UK Watchdog Halts Adobe’s Acquisition of Figma

Adobe and Figma

The Competition and Markets Authority (CMA), the competition watchdog in the United Kingdom, has provisionally determined that Adobe’s proposed $20 billion acquisition of Figma would be harmful to the marketplace.

Adobe announced that it had purchased Figma, an extremely popular design platform and Adobe XD competitor, for $20 billion in cash and stock in September 2022. The acquisition has been under review since and, as a global company, multiple governments had to weigh in on the purchase.

The CMA published its findings Tuesday and provisionally found that “Adobe’s deal to buy Figma would likely harm innovation for software used by the vast majority of UK digital designers.”

The CMA investigation found that around 80% of the professional product design market in the UK uses Figma’s software.

The watchdog says that the purchase of Figma would eliminate the existing competition between two main players in the product design software space and therefore reduce innovation and development of new competitive products while removing Figma as a threat to Adobe’s flagship Photoshop and Illustrator software products.

Given Time, Figma Would Have Challenged Adobe’s Image Editors

Prior to the announcement that Adobe planned to purchase the company, photographers and image editors very likely had not heard of Figma before as its software is used primarily in designing interactive mobile and web applications. But the CMA argues that would change, given time. It argues that Figma would continue to take steps to expand and advance its software suite and put itself in a position to directly threaten Adobe’s position at the top of the image editing and illustration space.

“Figma is a credible future competitor to Adobe in image editing and illustration software — and that the threat posed by Figma has driven product development in Adobe’s Photoshop and Illustrator applications, including new web versions,” the CMA investigation reads.

“The inquiry group considers that if the deal went ahead, it would eliminate Figma as a competitor which would otherwise have continued to seek to develop its capabilities in image editing and illustration, thereby fueling innovation and product development by Adobe. This competition would be lost as a result of the transaction, harming designers and creative agencies who might have used these new tools or relied on future updates.”

Adobe and Figma have until December 19 to make their case to the CMA.