Adobe and Figma deal will ‘harm’ digital design sector, UK report suggests
The country completed an in depth investigation of the $20b merger.
Back in June, the UK’s Competition and Markets Authority (CMA) began an in depth investigation into the planned $20 billion Adobe and Figma merger. The organization has released its findings and, well, they don’t paint a rosy picture. The probe tasked independent experts to determine whether or not the merger would reduce competition in the design space and the results suggest that, in fact, it’ll do just that.
It must be noted, however, that these are provisional findings. With that said, the CMA’s message is clear. The group states that the merger will “eliminate competition between two main competitors”, which is fairly obvious given Figma and Adobe’s standing in the industry. The findings also state that the deal would “reduce innovation” and the development of competing products. Finally, it’ll also “remove Figma as a threat” with regard to Adobe’s flagship software suites like Photoshop and Illustrator.
Figma is a giant player in the UK design space, accounting for 80 percent of the market. It’s also a major part of the country’s $19.4 billion app development sector. Without the merger, the CMA suggests, Figma would continue to develop or expand products that challenge Adobe. That goes away once the merger is in place because, you know, why challenge yourself?
The investigation concludes that the merger would eliminate competition between these two major players across multiple fields, including product design, image editing and illustration. These sectors account for $60 billion in annual revenue across the UK, adding up to nearly three percent of the national economy, with 850,000 skilled workers across the impacted industries. Another intent of the investigation was to suss out if the merger would damage the UK’s economy and it concluded it most likely will.
Again, these are provisional findings and the CMA has yet to consult the data to reach a final decision as to whether or not it’ll allow the sale to go through. It plans on taking some time to “listen to any further views,” likely referring to Adobe. To that end, Adobe argues that buying Figma would strengthen both companies, saying that the Creative Cloud apps would get some of Figma’s collaborative features and vice-versa. The company says it’s “deeply committed” to keeping Figma an independent entity and that it has no plans to change the pricing, including Figma’s free tier.
If the deal’s approved by the UK, which looks more unlikely with this report, Adobe still has some other battles to fight before this merger officially goes through. The acquisition still faces a US investigation, and the EU has issued its own dire warning.
This would be the larger-ever-purchase for Adobe in its storied 41-year history. Figma, on the other hand, is a relative newcomer to the market, springing forth in 2012.
