Facing Pressure from Global Antitrust Law Enforcers, Adobe and Figma Call it Quits

Adobe Inc. and Figma Inc. have agreed to terminate their merger rather than combat European, British, and U.S. competition law agencies which shared the opinion that the deal would harm the creative professionals who use their design software products. The companies “strongly disagreed” with the agencies, saying their combination would have been good for competition and consumers. To move forward with the deal in Europe, Adobe would have had to divest Photoshop or Illustrator, two ubiquitous design products, which the company called a “wholly disproportionate” remedy founded on an “uncertain and speculative theory of harm.” The same was true of the required divestment of Figma Design, the company said.

Adobe announced its intention to purchase the smaller Figma, maker of a cloud-based design platform, in September 2022 for $20 billion. Adobe agreed to pay Figma a $1 billion termination fee. Adobe generated more than $19 billion in 2023. Figma’s annual revenues were estimated to hit $600 million that year.

Margrethe Vestager, chief competition enforcer for the European Commission, said, “It is important in digital markets, as well as in more traditional industries, to not only look at current overlaps but to also protect future competition. This applies in particular to transactions by which large, established companies acquire successful disruptive innovators.” Officials of the Antitrust Division of the Department of Justice and the UK Competition and Markets Authority also hailed the decision of the companies to abandon the deal.

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