UK watchdog puts Adobe's $20bn Figma deal into regulatory limbo

UK watchdog the Competition and Markets Authority has provisionally ruled that Adobe's $20.0bn deal to buy Figma would likely harm innovation for software used by the vast majority of British digital designers.

The CMA said on Tuesday that the deal would eliminate competition between two main competitors in product design software, reduce innovation and the development of new competitive products, and remove Figma as a threat to Adobe's flagship Photoshop and Illustrator products.

Additionally, the CMA's investigation provisionally found that, without the merger, Figma would continue to take steps to develop or expand products that threatened Adobe's position in image editing and illustration.

Margot Daly, chair of the independent group conducting the CMA's investigation, said: "The digital design sector is worth nearly £60.0bn to the UK – representing 2.7% of the national economy – and employs over 850,000 people in highly skilled work. The software this sector uses is pivotal to its success, so the CMA has from the outset been very focused on ensuring this merger doesn’t adversely affect such an important part of the UK economy.

"This proposed deal, therefore, has the potential to impact the UK's digital design industry by reducing choice, innovation and the development of new competitive products. Today's decision is provisional, and we will now consult on our findings and listen to any further views before reaching a final decision."

Reporting by Iain Gilbert at Sharecast.com