Adobe's $20B Figma deal hit by in-depth probe in the UK
Software could be 'an emerging competitive threat' to luxury design SaaS maker, notes regulator
Updated The UK's Competition and Markets Authority (CMA) has decided to launch a full-blown probe of Adobe's takeover of web-first collaboration and software design house Figma after the companies failed to offer remedies to worries about the merger.
The $231 billion market cap software giant's $20 billion bid was launched in September, and regulators on multiple continents are closely inspecting the potential consequences for the health of the market.
Last month, Britain's competition watchdog threatened to open a wider investigation, saying it was worried the tie-up could "stifle innovation and lead to higher costs for companies" which rely on the tools published by the pair.
The CMA said Figma was "an emerging competitive threat" to Adobe across its toolset, which includes expensive design SaaS like Photoshop and Illustrator – both of which have become industry standards – as well as a competing vector design tool it calls "XD."
"Unless Adobe can put forward viable solutions to our concerns in the coming days, we will move to a more in-depth investigation," said CMA senior merger director Sorcha O'Carroll.
Clearly no such offer to assuage those concerns was forthcoming from Adobe, and the CMA said today it is referring [PDF] the proposed buy for enhanced investigation.
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The investigation and report by the CMA is expected "within a period ending on 27 December 2023." Adobe previously said it plans to complete the purchase of Figma before the year's end, and will have mere days to do so assuming the regulator waves through the acquisition.
Figma has an estimated 4 million users and a freemium tier allowing users to collaborate and share files without paying for additional licensing costs. Figma fans have said they are worried the vector design tool won't stay freemium, although Adobe's chief product officer, Scott Bellsky, has said the company was committed to a free tier after the acquisition. Previous experience may have taught users that where a free tier remains, features are taken away. We have asked Adobe about this.
The design tool recently added a raft of features aimed at developers, with our sister publication DevClass noting: "Dev Mode is free this year while in beta, but will require either a Figma editor license or a separate Dev Mode license from 2024. Separate licenses will cost $25 for organization plans or $35 for enterprise plans."
Prototyping is a feature for "all paid plans," according to CEO Dylan Field who spoke at Config 2023. If the Adobe/Figma deal goes through, DevClass notes, you can pretty much expect pricing changes. ®
Updated to add
Adobe has been in touch to say: "The combination of Adobe and Figma will deliver significant value to customers by making product design more accessible and efficient, reimagining creative capabilities on the web and creating new categories of creativity and productivity.
"We remain confident in the merits of the case as Figma's product design is an adjacency to Adobe's core creative products and Adobe has no meaningful plans to compete in the product design space. We look forward to establishing these facts in the next phase of the process and successfully completing the transaction."