Adobe-Figma merger faces scrutiny: UK authority raises competition concerns

The proposed $20 billion merger between Adobe and Figma, two powerhouses in the design software world, is currently under intense scrutiny, according to a new report by Engadget. The U.K.’s Competition and Markets Authority has released provisional findings from its in-depth investigation, raising substantial concerns about the merger’s impact on the competitive landscape of the design industry.

The CMA’s report suggests that the merger could significantly reduce competition by uniting two of the industry’s main competitors. This is particularly concerning given Figma’s strong market presence in the U.K., where it holds an 80% share. The investigation also highlights fears that the merger might stifle innovation and slow the development of competing products.

Economic implications and industry impact

The potential economic implications of the merger are significant. The design sectors affected, including product design, image editing, and illustration, contribute approximately $60 billion annually to the U.K. economy. This figure represents nearly three percent of the national economy and involves around 850,000 skilled professionals. The CMA’s findings indicate that the merger could adversely affect these sectors and, by extension, the broader U.K. economy.

Despite these concerns, Adobe remains optimistic about the merger’s benefits. The company argues that the acquisition of Figma would enhance both entities, integrating Figma’s collaborative features into Adobe’s Creative Cloud apps and vice versa. Adobe has committed to maintaining Figma as an independent unit and preserving its current pricing, including the free tier.

The CMA’s provisional findings are not the final decision on the merger. Adobe is expected to respond with further arguments supporting the acquisition. The CMA will take additional time to consider all viewpoints before reaching a conclusive decision. However, the merger faces challenges beyond the U.K. It is also under investigation in the United States, and the European Union has expressed concerns about its potential to hinder competition.

If approved, this merger would be the largest in Adobe’s 41-year history, marking a significant milestone for the company. Figma, established in 2012, has rapidly become a key player in the design software market. The outcome of this merger is of great interest to the global tech community, as it could reshape the design industry’s landscape not only in the U.K. but across the world. The tech industry awaits the CMA’s final decision, understanding the profound impact this merger could have on competition and innovation in the sector.

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