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£16bn Adobe takeover could harm competition in digital design market – watchdog

The Competition and Markets Authority said it would now consult on its provisional findings (Alamy/PA)
The Competition and Markets Authority said it would now consult on its provisional findings (Alamy/PA) The Competition and Markets Authority said it would now consult on its provisional findings (Alamy/PA)

Adobe’s proposed 20 billion US dollar (£15.8 billion) takeover of fellow product design firm Figma could harm competition in the sector, the UK’s competition watchdog has said.

The Competition and Markets Authority (CMA) said the provisional findings of its investigation into the proposed takeover deal found that it would eliminate competition between two main competitors in the digital product design space and remove Figma as a threat to Adobe’s own products.

The CMA said its investigation by an independent group provisionally found the deal would impact competition in the UK in the areas of product design, image editing and illustration – and ultimately stifle innovation in those areas for consumers.

The watchdog said it would now consult on the provisional finding and any potential remedies to the competition concerns identified and would also welcome responses from interested parties by Tuesday December 19.

The CMA said it would then make a final decision on its standing on the deal by February 25.

Margot Daly, chair of the independent group conducting the investigation, said: “The digital design sector is worth nearly £60 billion to the UK – representing 2.7% of the national economy – and employs over 850,000 people in highly skilled work.

“The software this sector uses is pivotal to its success, so the CMA has from the outset been very focused on ensuring this merger doesn’t adversely affect such an important part of the UK economy.

“Adobe and Figma are two of the world-leading providers of software for app and web designers and our investigation so far has found that they are close competitors.

“This proposed deal, therefore, has the potential to impact the UK’s digital design industry by reducing choice, innovation and the development of new competitive products.

“Today’s decision is provisional, and we will now consult on our findings and listen to any further views before reaching a final decision.”

The deal between the two US firms was announced in September last year.

Figma is a tool used by many businesses to build websites and apps, while Adobe competes through its Adobe XD product and is also widely known for its image editing and illustration products.