18 July 2023

UK launches in-depth probe into Adobe's acquisition of Figma

The CMA (Competition and Markets Authority) is launching a thorough investigation into the acquisition, citing concerns that the transaction may lead to a significant lessening of competition. The investigation comes after Adobe said it would not provide any remedies to address the regulator's concerns.


Last month, the CMA announced its findings that the deal could lead to reduced options for makers of digital apps, websites and other products. In order to investigate the matter further, a 'Phase 2' investigation has been launched involving a panel of independent experts who will assess whether the merger will actually reduce competition in the software design sector. The CMA has set a deadline of 27 December to complete its review.

The software giant, with a market capitalization of $237 billion, made a $20 billion takeover bid for Figma in September. Figma provides a browser-based application that efficiently organizes files by presenting projects and related files in a specified format. This vector graphics editor and prototyping tool does not require installation, patching or updates, offering convenience to users. Founded in 2016, Figma has managed to raise up to $333 million in funding. It has an estimated 4 million users, and offers a free version that allows users to collaborate and share files without additional licensing fees.

Despite the ongoing review by US and EU regulators, Adobe remains optimistic that the transaction will be completed by the end of the year. The European Commission has set a provisional deadline of 7 August to decide whether to approve the transaction or to launch its own in-depth investigation.

The UK Competition and Markets Authority (CMA) is also currently investigating Microsoft's potential acquisition of leading games publisher Activision Blizzard. It believes that Microsoft may gain a commercial advantage by making Activision's games available exclusively on its cloud gaming service or on unfavourable terms on other services. If Microsoft acquires Activision Blizzard, it will strengthen its strong position in cloud gaming, which the regulator estimates accounts for 60-70 % of global cloud gaming services.

With the growing size and complexity of mergers and acquisitions, it is no surprise that regulators around the world are increasing their attention. Given concerns about potential monopolies, restrictions on competition and their impact on consumers, the aim of increased scrutiny by regulators is to ensure fair play and protect market dynamics.