Interview Preparation

The UK Competition and Markets Authority (CMA) has concluded what is adobe proposed offer of $20 billion for digital design rival Figma could result in a “substantial lessening of competition” in the UK for designers.

As a result of its initial findings, the CMA is advancing the case to a “phase 2” in-depth investigation, although the parties involved have five days to submit proposals that address the CMA’s concerns.

Multi-pronged investigation

Today’s announcement comes nearly two months after the CMA first revealed was investigating the merger that was first announced last September, inviting comments and submissions from relevant parties. In February, the European Commission (EC) also revealed that it was acquisition evaluation for competition reasons, with early indications suggesting that a long investigation is at stake. And elsewhere, the US Department of Justice (DoJ) is also allegedly preparing a lawsuit to block the deal.

To many outside observers, the growing regulatory blocks to the Adobe/Figma merger are not a big surpriseGiven the the deal certainly remove a major rival from Adobe’s path.

In its findings released today, the CMA pointed to Adobe’s suite of creative design software that encompasses illustrations, photos, videos and animations, and compared it to Figma, which it said offers “some basic creative design functionality as part of its software.” design tools” but lacks “advanced or standalone creative design tools”.

On the other hand, the CMA noted that Figma is the “largest provider of all-in-one screen design software,” which can be used for web and app design, as well as digital marketing, markets in which Adobe operates. .

Although the Adobe and Figma products are not identical, the CMA has tentatively determined that Adobe XD Vector Design Tool “It’s still one of the few close alternatives to Figma.” On top of that, the CMA said its investigation found that Adobe had been in the process of developing a new all-in-one design tool that included a range of functions including whiteboarding, marketing and product design, which it canceled ahead of its announcement. Fusion with Figma.

“The evidence suggests that Adobe’s efforts in product development were motivated, at least in part, by a desire to compete with Figma,” the CMA said. initial report notes. “Adobe’s internal documents regularly reference the competition with Figma and compare planned features with those offered by Figma.”

In terms of standalone, purpose-built creative design software, the CMA acknowledged that Figma is currently not a significant competitor to Adobe on this front, although it does offer some of these features in its screen design product, such as vector editing. . However, he also noted that Figma “has regularly explored” expanding its product suite in this realm through in-house development or acquisitions.

“As a result, the CMA found that the merger would remove a significant competitive threat to Adobe from the marketplace and result in a substantial decrease in competition,” it said.

An Adobe spokesperson said the combination of Adobe and Figma “will deliver significant value to customers by making product design more accessible and efficient, reinventing creative capabilities on the web, and creating new categories of creativity and productivity.”

The spokesperson also added that Adobe had no “significant” plans to compete with Figma in the broader arena of product design, and that bringing Figma under its wing would be an “adjacency” to Adobe’s core creative tools.

So, in a nutshell, all this is is that the CMA is now likely moving towards a deep Phase 2 investigation, with Adobe and Figma until July 7 to provide an acceptable resolution to the CMA’s concerns; however, it appears that Adobe does not plan to ship anything before this deadline.

“We look forward to establishing these facts in the next phase of the process and successfully completing the transaction,” the spokesperson added.