Figma's CEO Disheartened by Collapse of $20 Billion Adobe Deal Amid Regulatory Scrutiny

Dylan Field's vision of fostering competition and benefiting consumers through the acquisition of Figma by Adobe is thwarted by regulatory opposition.

Adobe’s ambitious $20 billion acquisition of Figma, a rising star in design software, has fallen through, shedding light on the contrasting perspectives between businesses and regulators regarding competition.

Dylan Field, the CEO of Figma, expressed his frustration and sadness in his first interview since the announcement of the deal’s demise. The dissolution of the agreement is seen as a victory for antitrust enforcers, as both the European Commission and Britain’s Competition and Markets Authority were poised to challenge the transaction. The Justice Department was also contemplating opposing the deal.

Regulators’ primary concern revolved around the potential elimination of a future competitor if Adobe were to acquire Figma, drawing parallels to Facebook’s acquisition of Instagram in 2012. This apprehension has driven enforcement efforts against other notable acquisitions, including Microsoft’s takeover of Activision Blizzard and Meta’s acquisition of Within.

“It is important in digital markets, as well as in more traditional industries, to not only look at current overlaps but to also protect future competition,” Margrethe Vestager, the head of the European Commission’s competition policy, said after the deal’s demise was announced.

Mr. Field argued that the deal would have allowed Figma to expand its offerings, but acknowledged that there was a disconnect between regulators’ understanding of their business and their own perception.

As the deal unraveled, it became apparent that success was unattainable. Mr. Field stated that abandoning the transaction would provide clarity and certainty to employees and customers. Recognizing the changed enforcement climate, he conceded that finding another buyer for Figma would be challenging due to regulators’ opposition.

Despite the setback, Figma has continued to thrive, growing its workforce to 1,300 and acquiring Diagram, an AI-based startup, during the past 15 months.

For Adobe, the failed deal comes with a $1 billion breakup fee to Figma. Nevertheless, Adobe’s investors remained unfazed, as the company’s shares closed 2.5 percent higher on Monday.

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