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Adobe Defies UK Regulators Remedies in $20 Billion Figma Acquisition

 |  December 18, 2023

Adobe has rejected the proposed remedies put forth by the UK’s Competition and Markets Authority (CMA) in response to concerns surrounding its monumental $20 billion acquisition of design software company Figma.

This decision jeopardizes what could be the largest-ever takeover of a private software company and sets the stage for a high-stakes confrontation between Adobe and regulatory bodies.

The CMA expressed apprehension that the acquisition might eliminate competition in the product design software sector. Adobe, however, strongly criticized the CMA’s position, deeming the suggested remedies “disproportionate.”

In a statement released on Monday, an Adobe spokesperson asserted, “It is clear that no realistic remedy would satisfy the concerns the CMA is maintaining. We believe that the best path forward is to continue our ongoing engagement with the CMA on the merits” reported Bloomberg.

Adobe is scheduled to meet with the CMA later this week to present its case. The company’s acquisition of Figma is viewed as a strategic move, anticipating a trend where more creative work is conducted by small businesses and everyday users online—a market that Figma has rapidly captured. While Adobe has introduced more affordable products targeting this audience, the majority of its offerings remain heavyweight programs designed for specialists.

Related: EU Regulators To Asses Adobe’s $20 Billion Figma Deal

The CMA, contemplating the potential impact on competition, has hinted at two possible outcomes: blocking the merger or proposing a divestment package that involves selling Figma’s flagship product, Figma Design, along with Adobe XD. A final decision by the CMA is expected by February 25.

In addition to UK regulators, European Union authorities are closely scrutinizing the deal. Remedy proposals may be submitted to the EU watchdog this week, with a potential commitment from Adobe not to integrate Figma into its Creative Cloud package and a prospective divestment of Adobe XD, a direct competitor to Figma.

Dana Rao, Adobe’s top lawyer, had previously indicated the company’s willingness to cooperate with EU regulators. The bloc has until February 5 to issue a final decision on the matter.

Meanwhile, in the United States, Adobe is bracing for possible legal action from the Department of Justice, seeking to block the acquisition. During an earnings call last week, Adobe revealed its anticipation of a decision “soon.” The $20 billion deal is slated to close by the end of March, with potential legal complications triggering a $1 billion breakup fee owed to Figma if the deadline is not met and the deal falls through. The global tech giant faces a complex web of regulatory challenges as it navigates the path to finalize its acquisition of Figma.

Source: BNN Bloomberg