July 10, 2023

CMA announces concerns regarding proposed merger of two significant screen design software companies

The UK Competition and Markets Authority (“CMA”) recently concluded its Phase 1 investigation into Adobe’s proposed acquisition of Figma, Inc., the largest provider of all-in-one screen design software, which enables users to design mobile applications, websites and digital marketing material.  Adobe Inc., a global supplier of creative design software, announced in September 2022 that it entered into a definitive merger agreement to acquire Figma for $20 billion.  On June 30, 2023, the CMA announced that it had concerns regarding the loss of competition in the supply of all-in-one screen design software after its investigation determined that competition between the two companies had driven investment in updating and developing screen design software.  The CMA also found that Figma is an emerging competitive threat to Adobe in the provision of creative design software, and is well-positioned to expand its offering of tools for image, video, and animation content.  Without this rivalry, innovation in this market could be stifled, according to the CMA, and higher costs for companies that rely upon Figma and Adobe’s digital tools could ensue.  Unless Adobe and/or Figma addresses these concerns within five days, the CMA will move to a more in-depth, Phase 2 investigation.  If legally binding proposals are offered by Adobe or Figma, the CMA will have five additional working days to consider the proposals before a Phase 2 investigation could commence.

CMA Press Release | CMA – Phase 1 Decision | CMA Merger Inquiry – Case Summary | Adobe Press Release – September 15, 2022