The UK’s competition regulator has sounded a cautionary note regarding Adobe’s proposed $20 billion acquisition of the cloud-based designer platform Figma, stating concerns about potential innovation constraints for software extensively used by digital designers in the UK.
Scrutiny by the Competition and Markets Authority (CMA) revealed apprehensions that the buyout could stifle competition and eliminate Figma as a viable threat to Adobe’s prominent Photoshop and Illustrator products. The investigation was initiated in July after Adobe declined to offer concessions to allay the regulator’s concerns.
Adobe, in response, conveyed that it is currently reviewing the preliminary findings and intends to engage with the CMA to discuss the specifics and merits of the case, as mentioned in their statement.
The CMA has signaled its openness to consult with stakeholders and interested parties on the initial findings before reaching a final decision on the matter.
The digital design sector, valued at nearly 60 billion pounds in the UK, represents a significant 2.7 percent of the national economy and provides employment to over 850,000 individuals engaged in highly skilled work, according to the CMA’s assessments.
This antitrust investigation aligns with the global trend of heightened regulatory scrutiny surrounding acquisitions by Big Tech companies that bolster the market dominance of established entities or involve startups perceived as potential competitors, Reuters news report said.
Concerns over the Adobe-Figma deal have also been echoed by the European Union’s competition watchdog since its announcement in September 2022.
Dana Rao, Adobe’s chief counsel, conveyed to Reuters earlier this month the company’s willingness to propose solutions to address regulatory apprehensions.
In response to the regulator’s stance, a spokesperson from Figma expressed confidence in their deal with Adobe, emphasizing their conviction that the proposed merger would benefit consumers and should receive approval.
The ongoing review by the CMA underscores the complexities and challenges in regulating acquisitions in the technology sphere, aiming to balance market competition while fostering innovation and consumer interests in the digital design landscape.