Adobe's Buy of Figma Is 'Likely' Bad For Developers, Rules UK Regulator

Paul Kunert reports via The Register: Adobe's $20 billion buy of web-first design collaboration start-up Figma will harm software developers if it goes ahead as proposed, according to a provisional ruling on the merger by Britain's competition regulator. The Competition and Markets Authority launched a deeper investigation of the tie-up in July when it classified Figma as an 'emerging threat to Adobe.' Now in the latest twist, the regulator says it found the merger would eliminate one of two major players in three software sub-markets: product design; image editing; and illustration.

Figma's tools are used by well-known businesses that are key to the success of the digital economy, the CMA reckons, including Airbnb, Patagonia and Vodafone. Approving the acquisition 'would remove the constraint Adobe exerts on Figma through its product design software, AdobeXD.' The CMA adds in its report: 'The inquiry group also provisionally concluded that Adobe abandoned development of new product design software which could have competed even more closely with Figma and, given the timing of the decision, did this as a consequence of the merger. 'This supports the CMA's concern that this proposed deal would likely reduce innovation and the development of competitive new products.' Some software developers are worried that Adobe would up the price of Figma's subsciption post merger, something Figma denied would happen.

As for image editing and illustration software, the 'threat posed' by Figma has fueled product development of Adobe's Photoshop and Illustrator applications, including web versions, and this dynamic would be altered by the merger. 'This competition would be lost as a result of the transaction, harming designers and creative agencies who might have used these new tools or relied on future updates,' the CMA's report adds. The nature of the ruling is provisions., and the CMA will now consult of them and consider potential remedies 'which could include blocking the deal outright.'

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