Adobe’s $20 billion endeavor to acquire Figma, a cloud-based design platform, has hit a roadblock as European regulators’ concerns regarding potential competition issues led to the deal’s withdrawal. Dana Rao, Adobe’s General Counsel, revealed that despite efforts, they failed to convince European authorities that the acquisition wouldn’t negatively impact market competition.
Regulatory Concerns in EU and UK
The European Commission and UK’s Competition and Markets Authority (CMA) raised substantial doubts about the deal’s implications. The European Commission expressed worries that the acquisition might significantly diminish competition on a global scale. Concurrently, the CMA blocked the deal, fearing it could stifle innovation within the software realm, particularly among digital designers in Great Britain.
Adobe’s Defense and Stance
In defense, Adobe maintained there was no overlap in their client base with Figma and asserted the absence of complaints from competitors or clients regarding the acquisition—though this contradicts opinions from Figma users. Rao highlighted that the companies weren’t direct competitors as Adobe’s Figma-like product, Adobe XD, failed to compete effectively.
Antitrust Scrutiny and Conclusion
Rao highlighted regulators’ focus on new antitrust doctrines emphasizing future competition’s pivotal role in assessments. Despite Adobe and Figma’s scrutiny of regulatory concerns, they concluded it wasn’t viable to continue contesting the deal. Rao summarized regulators’ stance, stating that refraining from the deal was the only way to avert potential future competition issues, adds NIXsolutions.
Additionally, Rao differentiated Adobe’s situation from Microsoft’s successful acquisition of Activision Blizzard, suggesting it couldn’t serve as a direct precedent in their legal dispute with the CMA.