News Analysis
The Gist
- Adobe's largest acquisition to date. Experts agree the $20 billion deal to acquire Figma will have a significant imapct on the design software market.
- DOJ lawsuit. The US Department of Justice (DOJ) is said to be preparing an antitrust lawsuit against Adobe in a bid to block its $20 billion acquisition of Figma.
- Adobe remains confident. Adobe's CEO is fully prepared to face a challenge and optimistic his company will prevail.
The creative community was stunned last September when Adobe announced its $20 billion acquisition of Figma. Six months later, rumors of an imminent antitrust lawsuit have some questioning whether the deal is dead.
According to an inside source cited by Bloomberg, the Department of Justice is said to be preparing an antitrust lawsuit that could be filed as early as this week, in an effort to block Adobe's acquisition of the digital design startup. Reportedly, the DOJ is concerned that Adobe's acquisition of Figma may lead to less competition within the design software market, specifically for small and emerging companies.
But Adobe officials said they've already completed the discovery phase of the DOJ’s second request and are fully prepared for next steps — whether that’s an approval or a challenge.
Adobe CEO Stresses Support for Figma Acquisition Amid Antitrust Reports
In a recent earnings call, Adobe CEO Shantanu Narayen addressed the recent reports by stressing that the potential combination of Figma and Adobe continues to be well-supported by clients, industry experts and partners. The company remains “excited about the opportunity to advance product design, accelerate collaborative creativity on the web and redefine the future of creativity and productivity," he added.
As for the current regulatory process, Narayen said they are “preparing for integration” as they work through it.
“From the outset, we have been well-prepared for all potential scenarios, while realistic about the regulatory environment,” Narayen said. “Adobe remains confident in the facts underlying the case, and based on current process timing, we believe the transaction continues to be on track for a close by the end of 2023.”
Creative Community Anticipates Implications of Figma Acquisition
If the sale proceeds as planned, it would be Adobe's largest acquisition to date, with most experts agreeing the collaboration would have a significant impact on the design software market. As Adobe confidently awaits the DOJ's decision, the creative community contemplates what the outcome will mean for the future of design.
According to Khamani Harrison, CEO of The Key Bookstore, the potential antitrust lawsuit against Adobe is a sign of the times.
“As the tech industry continues to grow, the DOJ is taking a more active role in regulating the industry," Harrison said. "This is especially true for large tech companies that are acquiring smaller ones. It is important to remember that the DOJ is not necessarily against the acquisition itself, but rather, they are ensuring that the acquisition does not create a monopoly or anti-competitive environment."
From a customer perspective, the acquisition of Figma by Adobe could be beneficial, he added. "Adobe is a leader in digital experience software and Figma is a leader in design collaboration," Harrison said. "Combining the two could create a powerful platform for customers, such as UX designers, web designers, marketers, CX, and DX professionals. The acquisition could also create a more seamless experience for customers, with fewer software programs to learn and manage.”
Luke Lee, a designer and founder of the London-based Ever Wallpaper, has mixed feelings.
“As a business owner who uses both Adobe and Figma, on one hand, I can see the potential benefits of integrating Figma's design capabilities with Adobe's suite of creative tools. It could streamline our design workflow and make it easier to collaborate with our team and clients,” Lee said. “However, I am also concerned about the antitrust lawsuit and the potential impact it could have on the market. It's important to have competition and choice in the industry to ensure innovation and fair pricing. Ultimately, I think the success of the acquisition will depend on how well Adobe can integrate Figma's capabilities and whether it benefits its customers in the long run.”
Related Article: How Does Adobe's $20B Acquisition of Figma Impact UX Designers?
How Will Figma Fare Under Adobe?
Chinmay Daflapurkar, a digital marketing professional with Arista Systems Pvt Ltd, said the DOJ’s potential Adobe lawsuit may be influenced by the recent wave of antitrust scrutiny and enforcement against big tech companies in the U.S. and abroad.
“I’m looking forward to seeing how the acquisition will play out in the coming months. I’m interested in how Adobe and Figma will integrate their products, technologies and teams and how they will address the regulatory challenges and customer feedback,” he said. “I’m also excited to see what new features and capabilities they will offer to their users and how they will shape the future of design.”
He's also curious how the acquisition will affect the culture and autonomy of Figma.
“Figma has a loyal and passionate fan base that values its vision, mission and values,” Daflapurkar said. “I hope that Figma will be able to preserve its identity and spirit and continue to innovate and grow within the Adobe family."
Liam Liu, co-founder of ParcelPanel, is worried about Figma being dismantled for parts.
“I’m not looking forward to this acquisition, so hopefully, the DOJ files and wins this lawsuit,” Liu said. "I fear that, as it did with Macromedia, Adobe will scrap Figma for parts and eliminate the rest of it. Moreover, if the deal includes integrating Figma with Adobe Creative Cloud, it will significantly inflate prices and negatively affect free subscription tiers.”
However, he acknowledges his fears may be unfounded.
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“Adobe promised not to interfere with Figma’s free plan or to ruin its simplicity,” Liu said. “It also doesn’t sound wise for Adobe to misuse the goodwill of Figma users, as Adobe XD, its direct competitor, offers little competition.”
In September, when news of the acquisition first surfaced, Figma’s CEO Dylan Field made assurances that Figma would continue to operate independently.
"Adobe is deeply committed to keeping Figma operating autonomously and I will continue to serve as CEO, reporting to (Adobe's) David Wadhwani. David is someone I’ve known for a few years now and we have a strong relationship of mutual respect; I’m very excited for us to collaborate with him on how to continue growing Figma’s business," Field said in a statement. "The entire Figma team will report to me. We plan to continue to run Figma the way we have always run Figma — continuing to do what we believe is best for our community, our culture and our business."
Related Article: Adobe Unveils Generative AI Tech and Major Partnerships at 2023 Summit
DOJ Takes on Big Tech: Antitrust Actions Pile Up
Adobe isn't alone with this type of potential government intervention into business. The Biden administration has taken significant steps to increase the enforcement of antitrust laws. In January, the Department of Justice and the Attorneys Generals of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and Virginia filed an antitrust lawsuit against Google, accusing the company of monopolizing digital advertising technologies and alleging that Google unlawfully maintained its dominance in the market by using anticompetitive tactics to exclude rival platforms from accessing its ad exchange, and by manipulating the ad auction process to favor its own ad-buying tools.
“Today’s complaint alleges that Google has used anticompetitive, exclusionary, and unlawful conduct to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” Attorney General Merrick B. Garland, said in a statement. “No matter the industry and no matter the company, the Justice Department will vigorously enforce our antitrust laws to protect consumers, safeguard competition, and ensure economic fairness and opportunity for all.”
The lawsuit is the latest in a series of antitrust actions taken by the U.S. government against large tech companies, following similar suits filed against Facebook and Amazon. In March, the DOJ filed a civil antitrust lawsuit to block JetBlue’s proposed $3.8 billion acquisition of its rival, Spirit Airlines. Also this month, the Federal Trade Commission filed an antitrust complaint against the proposed merger between Microsoft Corp. and Activision Blizzard.
Earlier this month, Jonathan Kanter, assistant attorney general of the DOJ’s Antitrust Division, spoke about how the DOJ determines there are antitrust issues during a conference in Belgium.
“The question we must answer is whether the firm has engaged in a discriminatory course of dealing that improperly excludes competitors from the market,” Kanter said. “Such exclusionary discrimination can take a variety of pernicious forms in platform industries that share a common result: a distortion of the competitive process.”
Adobe Plans Figma Integration in 2023
Despite the distraction, Adobe's CEO is moving full-steam ahead with plans to integrate Figma sometime this year.
"Adobe remains confident in the facts underlying the case," Narayen said. "And based on current process timing, we believe the transaction continues to be on track for a close by the end of 2023."
As a business owner who provides web design and complex User Interface (UI) designs for clients using both Figma and Adobe, Eddie Deva, the founder and creative director at PixelBull LLC, is still excited about the acquisition and believes it will have a positive impact on the industry and the clients he serves.
“Adobe has a great reputation for providing leading design and editing software and Figma is a leading collaborative design platform used by many designers and creatives around the world, so combining the strengths of these two companies will allow for even more innovation and creativity in the digital design space.,” Deva said. “When designing and going the extra mile with an extremely complex and creative project, you need to use Adobe alongside Figma and it would be great to see them work together, it will make the flow easier.”
