Adobe and Figma mutually agreed to end their acquisition plans on Monday after European regulators found the deal would hurt competition in the digital design space. The $US20 billion acquisition would have combined the world’s leading product design software, Figma, and the world’s largest and most recognized supplier of design applications, Adobe.
“Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently,” said Shantanu Narayen, chair and CEO of Adobe, in a Monday press release.
Adobe’s Figma acquisition was announced in September of 2022, and the deal has faced plenty of pushback from EU regulators in the last month. Regulators were concerned that a combined Adobe and Figma would create an all-encompassing design ecosystem that would harm competition. The United Kingdom’s antitrust watchdog, the Competition and Markets Authority, was the latest to pump the brakes on the Figma deal, which said the deal would harm innovation and allow Adobe to buy a major competitor. The European Union sent Adobe a “statement of objections” over the deal in November, noting ways the acquisition would “significantly reduce competition in the global markets.”
“Going through this process with Shantanu, David and the Adobe team has only reinforced my belief in the merits of this deal, but it’s become increasingly clear over the past few months that regulators don’t see things the same way,” said Dylan Field, co-founder and CEO of Figma. Field went on to say he was disappointed in the outcome.
Adobe was unwilling to compromise on the remedies proposed by the United Kingdom’s CMA. Just last week, Adobe responded to the CMA’s objections to its Figma acquisition by calling it “wholly disproportionate.” Adobe argues that its main competitor to Figma is Adobe XD, a software design tool that the company called a “commercial failure.” That argument was shaky, however, as most designers use Adobe products and Figma in their workflow.
U.S. regulators were more lenient regarding Adobe’s acquisition of Figma. The Department of Justice met with Adobe executives just last week to secure approval for the merger, reports Politico. The agency was looking into an antitrust lawsuit against Adobe as early as February, but never formally filed a case. Adobe will now pay Figma a $US1 billion termination fee that was laid out in the initial terms of the deal “if the transaction fails to receive regulatory clearance.”