What happens if regulators nix the $20B Adobe-Figma deal?

When Adobe announced it was putting up $20 billion to buy Figma in September 2022, it didn’t take long before people began assuming it was a blatant attempt to take a competitor off the market. 

It was certainly curious, especially considering the offer was double what the company’s most recent valuation had been and worth around 50x Figma’s revenue. It’s hard to argue that the deal wasn’t a display of brute force on Adobe’s part, the kind of corporate rollup that regulators are trying to put a stop to after years of letting the tech giants run rampant, buying up startups that could eventually erode their market share.

The proposed Adobe-Figma deal has certainly gotten the attention of regulators — and not in a welcoming way. Already, the Justice Department, the Competition and Markets Authority (CMA) — Britain’s competition watchdog — and the EU are taking long, hard looks at the deal, and it wouldn’t be too much of a stretch to think that any of them could nix the deal for being anticompetitive.

“We are still in preliminary phases of the regulatory process and are having constructive discussions with the CMA, EC and DOJ about the businesses, markets and positive economic impacts this deal will bring to support [customers’ positive] reviews [of the product],” an Adobe spokesperson told TechCrunch+.

It seems pretty obvious even to a casual observer that Adobe is trying to take a potential rival off the board, a move that could stifle both competition and innovation, not a great mix for design software consumers. 

To be sure, the deal would give Adobe an entirely new look, one it has tried to build on its own with a design tool rival, Adobe XD. But XD never gained much traction, which explains why the company was willing to fork over $20 billion to get the cream of the crop.

In an interview at TechCrunch Disrupt last fall, Figma co-founder Dylan Field argued that the two companies would truly be better together. But of course he has 20 billion reasons to think that.

When asked to explain why he decided to join forces with the company that his marketing team had been painting as its biggest rival, he saw two companies marrying creativity and design, and he couldn’t see having the resources to move in that direction on his own, at least not for a long time. “If we want to go and make it so that we’re able to go into all these more productivity areas, that’s gonna take a lot of time. To be able to go and do that in the context of Adobe, I think gives us a huge leg up, and I’m really excited about that,” Field said.

But with regulators looking closely, it’s not a stretch to wonder if that’s ever going to happen. But even if it does, would the deal be a net-positive for Figma and its backers? Let’s talk about it.