The purchase of figma is getting complicated more and more for Adobe. After confirming that the European Commission will initiate an investigation of the operation, now it is the turn of the North American authorities. A report of Bloomberg indicates that the United States Department of Justice prepares an antitrust lawsuit to block the purchase agreement.
Sources close to the outlet confided that the Department of Justice would present the case next month, although it could be delayed. US authorities fear the purchase will reduce software options for design professionals. The acquisition agreement, set at $20 billion, It has lit red flags in the regulators of several countries.
The European Commission announced a few days ago that it would review the operation in detail, after receiving a referral request from Austria. Although the value of the transaction does not reach the threshold established by the EU Merger Regulation, the regulatory bodies of Austria, Germany, Italy and other member countries asked the Commission to evaluate it. In the eyes of the authorities, the purchase of Figma could affect competition in the design market.
Although there is no confirmation that the Department of Justice is preparing a lawsuit, the decision does not surprise anyone. Both the European Union, the United States and the United Kingdom, have toughened their policies to stop the advance of big technology. Multi-million dollar deals are scrutinized and the most obvious case is Microsoft’s purchase of Activision Blizzard.
The purchase of Figma would significantly affect competition
The purchase of Figma is generating concern among regulators and users, since Adobe would limit the options of professionals in the creative market. Whiteboard software is one of the most popular and its creators know it. In fact, this is not the first time that Photoshop owners have tried to acquire it.
According to the sources, Adobe has already met with the Department of Justice in order to address concerns. In addition to the investigation by the European Commission, the purchase agreement is also reviewed by the UK Competition and Markets Authority (CMA). A company spokesperson confirmed that they are talking with various regulators in order to close the purchase this year.
The problem for Adobe is that the purchase of Figma could trigger an extended review that would conclude in March 2024. Although companies declare that they are confident or that they work closely with regulators, the truth is that Merger deals like this require approval from multiple authorities antitrust before finalization.
It would not be the first lawsuit that Adobe is waging
Adobe, like other big tech companies, has fought previous battles over antitrust issues. One of the most significant it happened in October 1994when the Federal Trade Commission (FTC) forced him to sell FreeHand, since it competed with Illustrator. Years before the litigation, Adobe announced the purchase of Aldus Corporation, creators of PageMaker, After Effects and the TIFF standard.
Although FreeHand was not developed by Aldus, it was licensed for commercialization. Because competed directly with Illustrator, the FTC ordered Adobe to sell it for remedy the decrease in competition resulting from the acquisition. Altsys Corporation, creators of FreeHand, recovered the license rights and sold it a year later to Macromedia.
The curious thing about it all is that Adobe bought Macromedia in April 2005, so FreeHand was back in their hands. The 10-year term imposed by the FTC had expired, so there was no problem in owning the application. However, Adobe discontinued the software two years later, despite user complaints.
The purchase of Figma is one more step in Adobe’s strategy to monopolize the design market. Along with Macromedia, the company owns Behance, Typekit (Adobe Fonts), Aviary, Mixamo, Magento, and Allegorithmic, creators of the popular Substance suite of tools. In most cases, the users of those apps are not happy having to deal with a company with lousy support and abusive subscription models.
