Just over a year after announcing a purchase deal, Adobe has backed off one of the biggest acquisitions in the software industry, its $20 billion purchase of design tool Figma. The regulatory processes in Europe and the United Kingdom have played a determining role in the decision.
“Figma and Adobe have reached a joint decision to end the acquisition. It is not the result we expected, but despite the thousands of hours we spent with regulators around the world detailing the differences between our businesses, our products and the markets we serve, we no longer see a path towards the approval of the agreement,” they explain from Figma.
The decision has taken the entire industry by surprise. Although it was clear that Adobe was going to face scrutiny from antitrust agencies, the product fit well within the company’s creative tools offering and it was believed that, with some concessions, the purchase could go ahead.
Signs that the deal could go awry began to appear late last month, when the UK Competition and Markets Authority (CMA) said the deal would harm the software industry used by the vast majority of designers. UK digital platforms, echoing similar EU concerns about potentially reducing competition.
For the past year, Adobe has tried to convince regulatory agencies that Figma is not actually a competitor to any of its current applications, and therefore the acquisition does not eliminate competition from the market.
Although Adobe has some design tools that touch or overlap with the options that Figma offers designers, such as Adobe XD, Figma offers others that currently have no equivalent within the company’s Creative Suite.
Over the last few years, Figma has become an incredibly popular application among designers and programmers for the way it allows them to work together on projects, especially when designing mobile applications. Companies like Slack, Twitter or Netflix use it to create their own, for example.
The agreement in September of last year, however, set off the alarms of many independent designers, who suspected that after the purchase, access to Figma would increase in price. Figma allows designers to use the app completely free of charge with their personal files, and create up to three collaborative projects in the cloud. The company has monthly and annual subscription plans, but designed for large work groups.
Among the conditions, Adobe agreed to pay one billion dollars to Figma if the purchase ultimately failed, as was the case.