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Adobe’s $20bn Figma deal will harm competition, says UK regulator

Adobe Figma Image credit: Adobe

The UK competition regulator is expected to block Adobe’s $20bn (£15.8bn) deal to acquire design software firm Figma after finding it would likely harm the sector.

The Competition and Markets Authority (CMA) in its provisional report, following an in-depth probe in July, said the deal would harm innovation for software used by the “vast majority” of UK digital designers.

The CMA said that as Figma provides software used by 80% of the UK professional product design market, a merger with its largest competitor would eliminate competition in product design, image editing and illustration.

The regulator said the sector is worth nearly £60bn to the UK, representing 2.7% of the national economy.

“The software this sector uses is pivotal,” said Margot Daly, chair of the independent group that conducted the investigation.

“Adobe and Figma are two of the world leading providers of software for app and web designers and our investigation so far has found that they are close competitors.

“This proposed deal, therefore, has the potential to impact the UK’s digital design industry by reducing choice, innovation and the development of new competitive products.”

The decision from the CMA is provisional and the watchdog will continue to consult and take further views before reaching a final decision.

A spokesperson for Adobe said: “We are reviewing the provisional findings and will re-engage with the CMA on the facts and merits of the case.”

A Figma spokesperson said: “We strongly disagree with the assertion that Figma competes with Adobe today or has plans to do so in the future. We remain committed to the deal, confident in the facts, and convinced that our proposed combination with Adobe is a win for consumers”.

The CMA has been engaged in a number of high-profile competition cases with Big Tech firms this year, including Microsoft, Google, Meta and Amazon, and has drawn criticism from some that say its strict approach is anti-business.

Microsoft president Brad Smith said in June that the CMA’s original decision blocking the company’s acquisition of Activision Blizzard – which was later approved – suggested the UK was “closed for business”.

Competition regulators in the UK are set to have even greater authority in governing tech deals from the Digital Markets Bill. Concern over the potential backlash from Big Tech, however, led to an amendment being added this month that gave large tech companies an easier route to challenge CMA decisions.