The findings of the phase 2 probe into the deal are preliminary, and the British competition watchdog will commence consultations on them, along with potential solutions to address the identified competition concerns, which may involve outright blocking of the deal
Adobe, Figma deal continues to face regulatory hurdles. (Credit: Adobe)
The UK Competition and Markets Authority (CMA) announced that the in-depth phase 2 investigation into Adobe’s previously announced $20bn acquisition of Figma has been provisionally found to be harmful to the British digital design sector.
According to the British competition watchdog, the proposed merger would remove the competition between two main parties in product design software, image editing, and illustration.
Besides, the deal will reduce innovation and the development of new competitive products and eliminate Figma as a competitor to Adobe’s photoshop and illustrator products, said the CMA.
The phase 2 probe into Adobe’s acquisition of the web-first collaborative design platform was launched in July this year by the regulator.
Following the deeper investigation, the CMA has provisionally concluded that in the absence of the deal, Figma would continue to take steps to develop and expand products that will challenge Adobe’s position in image editing and illustration.
The findings are preliminary, and the CMA will commence consultations on them, along with potential solutions for the identified competition concerns, which may involve outright blocking of the deal. The CMA is inviting responses from interested parties until 19 December 2023.
The responses will be considered by the regulator before issuing its final decision by 25 February 2024.
CMA chair of the independent group carrying out the investigation Margot Daly said: “The digital design sector is worth nearly £60bn to the UK – representing 2.7% of the national economy – and employs over 850,000 people in highly skilled work.
“The software this sector uses is pivotal to its success, so the CMA has from the outset been very focused on ensuring this merger doesn’t adversely affect such an important part of the UK economy.”
The cash and stock deal was announced by Adobe in September 2022. Apart from the UK CMA, the deal has been under an in-depth phase 2 probe in the European Union, which was launched by the European Commission in August 2023.