The top competition watchdog in Britain stated on Tuesday that Adobe’s proposed $20 billion acquisition of Figma might be detrimental to the digital design industry in the United Kingdom. These conclusions could be a significant setback for the merger.
The acquisition may “eliminate competition,” “limit innovation,” and “remove Figma as a threat to Adobe’s flagship Photoshop and Illustrator products,” according to a release from the Competition and Markets Authority. The regulator stated that although the results are preliminary, it will look into possible solutions, “which might include banning the purchase altogether.”
September of last year saw Adobe announce plans to purchase Figma for $20 billion. Figma allows users to collaborate on app and website creation. The European Union, the U.S. Department of Justice, and regulatory bodies in the United Kingdom have all examined the agreement.
Within a market where Figma is already by far the dominant player and where few other competitive constraints exist, the merger would eliminate competition between close competitors and an important competitive constraint on Figma, according to the CMA’s preliminary conclusion in the release.
The CMA’s conclusions “disappoint” Figma, a spokesman told CNBC, and the business “seriously disagrees” with the notion that Figma already competes with Adobe or will do so in the future.
The spokesman stated, “The realities are that Figma has not invested a single dollar or recruited a single engineer to build creative tools, and Figma operates in a vibrant and very competitive market for product design and development.” “We are persuaded that our proposed combination with Adobe will benefit customers and should be authorised. We are still committed to the agreement and confident in the facts.”
Adobe expressed its “disappointedness” and disagreement with the CMA’s viewpoint.
Source (CNBC)
