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UK Antitrust Regulator Warns Against Adobe’s $20bn Deal with Figma

 |  November 28, 2023

The UK’s antitrust regulator, the Competition and Markets Authority (CMA), has raised serious concerns about Adobe’s proposed $20 billion merger with Figma, stating that it would harm competition in the product design software sector. The regulator’s provisional findings, released on Tuesday, also indicated potential threats to competition in image editing and illustration, reported The Financial Times.

The acquisition, first announced in September 2022, has drawn attention due to its significant valuation of Figma at approximately 50 times its annual recurring revenue, doubling its last private funding round in 2021. Critics of the deal argue that the substantial price tag reflects Adobe’s attempt to eliminate what is perceived as its most promising new rival in decades.

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

Margot Daly, chair of the independent group conducting the CMA’s investigation, emphasized the competitive landscape between Adobe and Figma, stating, “Adobe and Figma are two of the world-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 UK’s digital design industry by reducing choice, innovation, and the development of new competitive products.”

The CMA’s concerns are not isolated, as this month, the European Commission, the EU’s executive body, also expressed objections to the deal after an in-depth investigation. Antitrust regulators in Brussels shared apprehensions that the merger could “significantly reduce competition in the global markets” for the supply of interactive product design tools.

The companies involved have the option to propose concessions to address the regulatory concerns before a final decision is made. The CMA is expected to reach a conclusion by the end of February.

Source: FT