Adobe Acquisition of Figma Faces Anti-Competition Scrutiny

On June 30th, the Competition and Markets Authority (CMA) made an official declaration regarding their investigation into the potential anti-competitive implications of Adobe’s proposed acquisition of Figma. Unless both parties offer significant undertakings to address competition-related issues, particularly in the realm of screen design software, where Figma enjoys a dominant market position, the transaction will be subjected to Phase 2 investigation.

Adobe has been granted a period of five working days to respond to the CMA’s inquiry. This protracted scrutiny and regulatory screening process could prove to be highly detrimental to Adobe, as they lag behind in the online screen design domain and possess no internal strategies for developing such capabilities in the event of a deal collapse.

The CMA’s recent action further substantiates their renewed commitment to preventing anti-competitive acquisitions, as demonstrated by their previous decision regarding the landmark MicrosoftActivision deal earlier this year. Subsequent developments in the coming weeks will reveal whether Adobe and Figma can address the CMA’s concerns.