EU raises antitrust concerns about Adobe’s purchase of Figma

This post was originally published on this site

Adobe’s $20 billion bid for cloud-based product design platform Figma is being hit with an antitrust complaint by E.U. regulators. An in-depth investigation by the European Commission came to the preliminary conclusion the deal could significantly reduce competition for interactive product design tools, vector editing tools and raster editing tools.

Figma is the “clear market leader” in interactive product design tools, the report found, and Adobe is “one of its largest” rivals. As a result, the “transaction is likely to create a dominant player by combining these market positions. … Furthermore, it will result in the discontinuation of Adobe’s own interactive product design tool, Adobe XD, as well as any potential successor product and thus constitute a so-called ‘reverse killer acquisition’.”

Impact already being seen. Adobe already started to phase out the availability of Adobe XD — a UX/ UI product design app similar to Figma — earlier this year, after announcing the deal. Investigators described Figma as a significant constraining influence over Adobe’s Illustrator and Photoshop editing tools, one that is likely to grow into a competitive force within the market. 

Why we care. Monopolies are bad for everyone — even the company that has the monopoly. Competition fuels innovation and helps keep prices low. Businesses with monopolies have a high risk of being disrupted into near extinction when someone comes along with a better, faster and/or cheaper version.

Dig deeper: Adobe’s roadmap for B2B, CDP and product analytics        

Market share. Figma is the best-selling program in the collaborative design and prototyping category, according to 6Sense, with 33,185 customers and a 36.36% market share. The next two biggest sellers — Adobe Premiere Pro CC and Adobe XD —  have a combined 32,900 users and 36% market share.

Possible response. Adobe and Figma can now respond to the objections in writing to offer concessions that address the Commission’s precise regulatory concerns and request a hearing. Both Adobe and Figma have reportedly not provided any remedies to address antitrust concerns raised by the investigation.

Other governments looking at the deal. The transaction would represent the most expensive sale of a privately owned software company in history and was flagged as a concern by 16 member states of the European Union in February. The proposed merger is also being inspected by the U.K.’s Competition and Markets Authority and the Department of Justice’s antitrust team.

Get MarTech! Daily. Free. In your inbox.

Related stories

New on MarTech

About the author

Constantine von Hoffman

Constantine von Hoffman is managing editor of MarTech. A veteran journalist, Con has covered business, finance, marketing and tech for, Brandweek, CMO, and Inc. He has been city editor of the Boston Herald, news producer at NPR, and has written for Harvard Business Review, Boston Magazine, Sierra, and many other publications. He has also been a professional stand-up comedian, given talks at anime and gaming conventions on everything from My Neighbor Totoro to the history of dice and boardgames, and is author of the magical realist novel John Henry the Revelator. He lives in Boston with his wife, Jennifer, and either too many or too few dogs.