The Department of Justice (DOJ) is reportedly planning an antitrust action to prevent Adobe from acquiring the startup Figma for $20 billion.
According to Bloomberg's report, an anonymous source stated that a case might be brought as early as next month.
Antitrust Concerns
Several antitrust agencies must approve the merger before it can go through, and the deal agreement includes a regulatory review extension provision with a completion date of March 2024. Adobe already met with the DOJ on Thursday, Feb. 23.
The European Union's (EU) antitrust watchdog has indicated that it has received requests from national authorities to investigate the acquisition on antitrust grounds. The merger is also being examined by the UK's Competition and Markets Authority (CMA), and the three governments' probes are typically coordinated.
Adobe is in "constructive and cooperative discussions with regulators in the US, UK, and EU, among others," according to a company representative. The deal is still expected to conclude this year.
The antitrust division worries that the purchase will limit the variety of alternatives available to the design software professionals. Apparently, the buyout would be one of the biggest takeovers of a private software manufacturer.
There was also concern among Figma's customer base that the purchase would lead to a halt in product development or an increase in pricing. Adobe has promised to maintain the program's free tier and not interfere with Figma's current development plan.
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Adobe-Figma Acquisition
In September 2022, Adobe announced that it would be acquiring Figma, a competitor to Adobe's industry-leading design program.
The acquisition represents a large wager on the expectation that more individual users and small companies would move their creative work online, a field that Figma has quickly dominated. While Adobe has created lighter, more accessible solutions for that market, the majority of its products are still robust suites designed for experts.
Figma is a popular alternative to Adobe's XD for creating user interfaces for apps and websites. Adobe has contended that the deal is not anti-competitive since the company in question does not compete with any of Adobe's flagship products like Photoshop or Premiere.
According to a document outlining the merger's inner workings, Adobe attempted to acquire Figma in 2020 and 2021 as the business gathered momentum fast.
In 2022, when many of its competitors were facing declines, Figma accepted an offer that would have doubled its worth. Market watchers considered the price tag as evidence of intense competitive pressures facing Adobe.
Before deciding to go with Adobe's offer, Figma also tried to get a proposal from Microsoft.
