UK Watchdog Says Adobe Acquisition Of Figma Threatens Innovation

The United Kingdom’s antitrust regulator has found that Adobe’s planned acquisition of Figma could reduce innovation.

The Competition and Markets Authority (CMA) said in a Friday (June 30) press release that Adobe has five working days to submit proposals to address the concerns raised in the CMA’s initial investigation before the regulator proceeds to a more in-depth review.

“We’re worried this deal could stifle innovation and lead to higher costs for companies that rely on Figma and Adobe’s digital tools — as they cease to compete to provide customers with new and better products,” CMA Senior Mergers Director Sorcha O’Carroll said in the release. “Unless Adobe can put forward viable solutions to our concerns in the coming days, we will move to a more in-depth investigation.”

Read more: EU Watchdog To Investigate Adobe’s $20 Billion Figma Acquisition

A Figma spokesperson said in a statement emailed to PYMNTS that it believes the two companies can deliver more value for customers together than either could deliver alone.

“Our combined and complementary strengths give us the opportunity to make world-class design, creativity and productivity tools available to anyone with a web connection,” the Figma spokesperson said. “We believe strongly that our proposed combination with Adobe will not result in any reduction of competition in our respective markets, and we look forward to continued conversations with the CMA focused on the benefits a combined Adobe-Figma entity will bring.”

Adobe did not immediately reply to PYMNTS’ request for comment.

The planned $20 billion acquisition was announced by Adobe in September, with the company saying the deal would boost makers’ creativity and productivity by adding Figma’s multiplayer workflows, design systems and developer ecosystem to Adobe’s range of tools and platforms.

The CMA said in the release that Adobe and Figma both have products that compete in the market for screen design software, which is used to design applications, websites, and other digital products and services.

Figma is also emerging as a competitive threat to Adobe’s creative design software that is used for image, video and animation content, according to the CMA.

“The CMA is concerned that Adobe’s plan to acquire Figma removes a leading player from the market and reduces both firms’ incentives to invest in software development and compete against one another, which could result in higher costs as well as fewer and less innovative products,” the CMA said in the release.