British regulator: Adobe’s Figma takeover may be bad for innovation

The British regulator CMA says, based on a preliminary investigation, that it is afraid that Adobe’s acquisition of Figma could be bad for innovation. The regulator is considering further investigating the takeover. Adobe wants to pay $20 billion for Figma.

Figma is a design tool that lets designers collaborate in real time. The tool therefore competes with certain Adobe services. That competition is according to the British watchdog Competition and Markets Authority good for consumers, because it drives both companies to improve and invest in their software.

CMA therefore fears that this competition will be lost if the takeover is allowed to go ahead. Figma is also positioned to grow and develop more competitive tools, CMA says. This innovation could be lost in the planned takeover. The acquisition could also result in higher costs for customers.

Adobe now has five business days to respond to CMA’s concerns and come up with legally binding proposals to alleviate those concerns. The supervisor then has five working days to determine whether these proposals go far enough or not. If Adobe does not go far enough according to CMA, further investigation may follow.

The acquisition was announced in September last year. The CMA may not be the only regulator critical of the deal; the European Union would also like to investigate the deal further later this year, writes Financial Times earlier on Friday, according to sources. According to the same medium, the United States would even want to start a lawsuit to stop the takeover. Adobe previously expressed the hope that the acquisition could be completed this year.