Adobe Figma deal thrown into jeopardy following CMA probe
Clock is ticking on Adobe Figma deal
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The UK’s Competition and Markets Authority (CMA) really isn’t happy about thatAdobeandFigmamerger - and it wants the company to prove the controversial deal isn’t a threat to its rivals.
Following a two-month investigation, the CMA haspublished its Phase One decision, saying the proposed merger “may be expected to result in a substantial lessening of competition” in the UK. These concerns are shared in the US and EU, where the $20bn deal is also under scrutiny.
Adobe has five working days to respond to issues raised in the investigation - the sort of response that comes with legally binding proposals attached - before the CMA decides its next steps.
Adobe, Figma, and the CMA
Adobe’s woes started on May 3 2023, when the CMA launched an inquiry to decide whether the deal would lead to “a substantial lessening of competition within any market or markets in the United Kingdom.”
Adobe is buying Figma for $20 billion - but not everyone thinks that’s a good idea>Adobe could be pushing its luck over Figma deal>Adobe could face legal action over $20bn Figma deal
Two questions were considered by the CMA: if the merger didn’t go ahead, would Adobe continue developing its own Figma-likeweb development tool, and in that scenario, would the company compete with Figma in the marketplace?
EnterAdobe XD. According to the CMA, theweb design softwareis “one of only a limited number of close alternatives to Figma,” and had been “a strategic priority for Adobe for a substantial period of time.”
It’s reported that the company made significant investments into developing XD. A large team of engineers were also working on a newwhiteboarding, marketing design, and product design tool. In a wild coincidence, that development ended just before the controversial acquisition was announced. Adobe told the CMA it had “decided to discontinue this project for reasons unrelated to the Merger.”
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It seems the CMA even flexed its creative muscles, with the investigation drawing on a range of tools used across the creative industries. This includedvideo editing software,logo makers,graphic design software, andVFX software. Sounds like a comprehensive suite to us.
Ultimately, the CMA conclusion is that Adobe and Figma are close competitors - specifically in what it calls ‘all-in-one screen design software’. It found Adobe was at least partly developing products to compete against its new best friend.
If the merger goes ahead in its current state, the CMA believes that competition would be lost. Moreover, with few comparablemockup sitealternatives available, competition in the sector would be generally diminished.
Steve is TechRadar Pro’s B2B Editor for Creative & Hardware. He began in tech journalism reviewing photo editors and video editing software at the magazine Web User, where he also covered technology news, features, and how-to guides. Today, he and his team of reviewers test out a range of creative software, hardware, and office furniture. Once upon a time, he wrote TV commercials and movie trailers. Relentless champion of the Oxford comma.
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