The Competition and Markets Authority (CMA) of the UK has announced its intention to conduct a thorough investigation into Adobe’s acquisition of Figma. The agency expressed concerns about potential anti-competitive effects in the screen design software market, prompting the initiation of a “phase two” investigation. However, the CMA has given both companies a grace period of five business days to present legally binding proposals to address the concerns. If the response fails to satisfy the CMA, the investigation will commence. Adobe had previously revealed its plans to acquire Figma, a smaller competitor, for a staggering $20 billion.
In its statement, the UK agency emphasized that Figma has gained a significant market share in the screen design software industry. It also acknowledged Adobe’s continuous investment and competition in this particular segment. The CMA recognized the healthy rivalry between Figma and Adobe, which has driven innovation and updates in screen design software. The agency expressed fears that such competition could be lost if the acquisition proceeds. It described Figma as an emerging competitive threat to Adobe and raised concerns about the potential decline in innovation resulting from the absorption of a promising upstart by a market giant. The CMA expressed worry that the acquisition might lead to increased costs and fewer innovative products.
The acquisition of Figma, headquartered in San Francisco, would mark the largest-ever purchase for Adobe, a design powerhouse with a 41-year history. Figma, founded in 2012, has made a name for itself as a popular vector-based design tool during its 11 years in the market. Its cloud-based software specializes in remote collaboration and directly competes with Adobe’s XD and Illustrator products. Adobe’s plan for the acquisition involved incorporating features from its Creative Cloud suite into Figma’s collaborative software while integrating more team-oriented functionalities into its core products. The company presented the acquisition as a mutually beneficial move for customers and pledged to maintain Figma’s independence, including its pricing, which includes a free tier.
Sorcha O’Carroll, the Senior Mergers Director at the CMA, expressed concerns about potential negative impacts on innovation and increased costs for companies relying on Figma and Adobe’s digital tools. O’Carroll stated that unless Adobe presents viable solutions to address the CMA’s concerns within the designated timeframe, a more extensive investigation will ensue.
Please note that all product recommendations made by BuyTechBlog are independent of our parent company and are selected by our editorial team. Some of our articles may contain affiliate links, through which we may earn a commission if you make a purchase. All prices mentioned are accurate at the time of publication.
Frequently Asked Questions (FAQs) about acquisition investigation
What is the UK’s investigation into Adobe’s acquisition of Figma?
The UK’s Competition and Markets Authority (CMA) is conducting an investigation into Adobe’s acquisition of Figma. The CMA has concerns about potential competition issues in the screen design software market.
Why is the CMA concerned about the acquisition?
The CMA is concerned that the acquisition of Figma by Adobe could lead to a substantial lessening of competition in the screen design software industry. They fear that the acquisition could result in higher costs and fewer innovative products for customers.
What action is the CMA taking regarding the acquisition?
The CMA has initiated a “phase two” investigation into the acquisition. However, they have given both companies a five-day window to provide legally binding proposals that address the CMA’s concerns. If the proposals are unsatisfactory, the investigation will proceed.
How does the CMA view the competition between Figma and Adobe?
The CMA recognizes that Figma has established a significant market share in screen design software and that Adobe has been competing in this segment. They highlight the importance of competition between the two companies, which has driven investment and innovation in the industry.
What are the potential consequences of the acquisition?
The CMA is concerned that the acquisition could lead to reduced innovation, higher costs, and fewer innovative products in the screen design software market. They believe that the acquisition may stifle competition and negatively impact companies relying on Figma and Adobe’s digital tools.
What are Adobe’s plans for the acquisition?
Adobe aims to integrate features from its Creative Cloud suite into Figma’s collaborative software while incorporating more team-focused functionalities into its core products. They have stated their commitment to keeping Figma an independent company and maintaining its pricing, including the free tier.
More about acquisition investigation
- The Wall Street Journal – The original source of the news regarding the UK’s investigation into Adobe’s acquisition of Figma.
- Competition and Markets Authority (CMA) – The official website of the UK’s Competition and Markets Authority, where you can find more information about their investigations and actions.
- Adobe – The official website of Adobe, the company involved in the acquisition of Figma.
- Figma – The official website of Figma, the screen design software company being acquired by Adobe.
- Creative Cloud – Information about Adobe’s Creative Cloud suite, which they plan to integrate with Figma’s software.
- BuyTechBlog – The website mentioned in the text that provides product recommendations, including affiliate links.
3 comments
cmA worried about adobe+figma merger. don’t want less competition. want innovation & low costs. hope they find good solution.
wow uk investigating adobe’s figma buy. they think less competition & higher costs & fewer innovative products. hope adobe comes up with solutions!
adobe buying figma? big news! but UK says hold on. think less competition bad. hope adobe fix it quick!