The proposed Adobe-Figma acquisition was one of the biggest potential deals in the design-software industry. Announced in September 2022, Adobe planned to acquire Figma for approximately $20 billion, a move that would have brought one of the most popular collaborative design platforms under Adobe’s ownership. However, after more than a year of regulatory scrutiny, Adobe and Figma abandoned the deal on December 18, 2023.
The failed acquisition became an important example of how competition regulators are increasingly examining major technology deals, particularly when a large established company wants to acquire a rapidly growing competitor.
What Was the Adobe-Figma Deal?
Adobe, known for products such as Photoshop, Illustrator, and Creative Cloud, announced its intention to acquire Figma in September 2022.
Figma had built a strong position in collaborative interface and product design. Unlike many traditional desktop design applications, Figma was designed around browser-based collaboration, allowing designers, developers, product managers, and other teams to work together in real time.
Adobe believed combining its creative software ecosystem with Figma’s collaborative platform could create new opportunities for designers and businesses.
The proposed transaction was valued at around $20 billion, making it a major acquisition in the software industry. The UK’s Competition and Markets Authority (CMA) later examined the deal in detail, including the competitive relationship between Adobe and Figma.
Why Did Adobe Want to Acquire Figma?
Several strategic factors made Figma attractive to Adobe.
1. Figma’s Growing Design Ecosystem
Figma had become an important platform for UI and UX design, prototyping, collaboration, and product development.
Its browser-based approach also made it particularly useful for distributed teams. Instead of relying primarily on individual desktop applications, teams could collaborate through a shared online workspace.
2. Adobe Wanted a Stronger Position in Collaborative Design
Adobe already had a huge creative software ecosystem, but Figma represented a strong competitor in modern collaborative product design.
The CMA’s investigation found evidence that Adobe had previously invested in developing its own screen-design products and considered Figma an important competitive force.
3. Combining Creative Tools and Collaboration
A successful acquisition could potentially have connected Figma’s collaborative workflow with Adobe’s broader collection of creative applications.
For users, that could have meant deeper integration between interface design, graphic design, illustration, video, and other creative workflows.
However, these potential benefits had to be considered alongside concerns about competition.
Why Did Regulators Oppose the Deal?
The biggest challenge was competition.
Regulators were concerned that Adobe’s acquisition of Figma could reduce competition in digital design software.
The UK’s CMA concluded that the proposed transaction could result in a substantial lessening of competition. It specifically examined competition in screen-design software as well as other areas of creative design software.
The concern was not simply about the number of companies in the market. Regulators also examined how competition affects innovation, product development, pricing, features, and future choices for customers.
The Concern Over Figma’s Independence
One major issue was what could happen to Figma if it became part of Adobe.
Figma had developed a strong independent position in collaborative design. Regulators considered whether Adobe’s ownership could reduce Figma’s incentive to compete aggressively with Adobe’s existing and future products.
This is especially important in technology markets because competition can encourage companies to improve products rapidly.
If a strong competitor disappears through acquisition, customers could potentially have fewer independent alternatives.
Adobe’s Own Product Development Was Also Important
The regulatory investigation examined Adobe’s previous attempts to develop products that could compete in the same general market.
The CMA’s published findings discussed Project Spice, an Adobe initiative intended to develop a web-based screen-design product. Adobe had invested significant resources in the project before deciding to discontinue it around the time the Figma acquisition was being pursued.
This became relevant to regulators because it raised questions about whether Adobe could have continued developing its own competing product instead of acquiring Figma.
The issue demonstrated that regulators were looking beyond the immediate transaction and examining the companies’ broader product strategies.
Regulatory Pressure Increased
The UK was not the only jurisdiction examining the transaction.
The CMA opened an investigation in May 2023 and later referred the deal for an in-depth Phase 2 investigation. By November 2023, the CMA had provisionally identified competition concerns.
The European Commission also issued a Statement of Objections in November 2023, according to the CMA’s case documentation.
As regulatory scrutiny increased, the possibility of completing the acquisition became increasingly difficult.
Why Did Adobe and Figma Abandon the Deal?
On December 18, 2023, Adobe and Figma announced that they were ending their proposed acquisition.
Figma stated that after 15 months of regulatory review, the companies no longer saw a path toward obtaining the necessary regulatory approvals.
The UK’s CMA subsequently cancelled its merger inquiry because the transaction had been abandoned.
This meant Adobe did not acquire Figma.
What Happened After the Deal Failed?
The end of the acquisition allowed Figma to remain an independent company and continue developing its platform.
For Adobe, the failed transaction demonstrated the difficulty of acquiring a fast-growing competitor when regulators believe the deal could affect competition in an important technology market.
The episode also highlighted a broader shift in technology regulation: large software companies cannot assume that financially attractive acquisitions will automatically receive approval.
What the Adobe-Figma Deal Means for the Design Industry
The failed acquisition had implications beyond Adobe and Figma.
More Attention on Competition
Regulators are increasingly evaluating whether major acquisitions could eliminate meaningful competitors, particularly in markets where technology changes quickly.
Independent Design Platforms Remain Important
Figma’s continued independence means designers and product teams can continue using a platform that developed outside Adobe’s Creative Cloud ecosystem.
Innovation Remains a Key Consideration
The case showed that regulators may consider not only current market share but also how a transaction could affect future innovation and product development.
Big Tech Acquisitions Face Greater Scrutiny
The Adobe-Figma case is another example of regulators taking a closer look at large technology acquisitions. Companies considering major mergers may now need to anticipate competition concerns much earlier in the process.
Adobe and Figma Today
The failed acquisition did not end the relationship between the two companies entirely. Figma and Adobe had also explored collaboration opportunities, and the companies ultimately remained separate after terminating the proposed merger. Figma continues to develop its design and collaboration ecosystem independently.
The outcome also changed the competitive landscape: instead of becoming another part of Adobe’s portfolio, Figma continued operating as an independent design platform.
Lessons From the Adobe-Figma Acquisition
The Adobe-Figma deal offers several important lessons for the technology industry:
- Market leadership can attract regulatory attention. Large acquisitions involving influential technology platforms are likely to receive detailed scrutiny.
- Innovation matters as much as market share. Regulators may examine how a merger could influence future products and technological development.
- Independent competitors can have strategic value. A smaller company may represent an important source of competitive pressure against a much larger company.
- Regulatory approval cannot be assumed. Even a financially strong buyer can face significant obstacles when acquiring a major competitor.
- The technology market changes quickly. Regulators increasingly consider potential future competition rather than looking only at today’s market conditions.
Final Thoughts
The Adobe-Figma acquisition was ultimately unsuccessful, but it remains an important case study in the technology industry.
Adobe saw Figma as a strategically valuable addition to its creative ecosystem, while regulators questioned whether the acquisition could weaken competition and innovation in digital design. After extensive regulatory scrutiny in multiple jurisdictions, the companies concluded that obtaining approval was no longer realistic and ended the transaction in December 2023.
The story demonstrates that the biggest technology deals are no longer judged solely by financial value or potential business benefits. Competition, innovation, customer choice, and long-term market impact can determine whether an acquisition succeeds or disappears before it is ever completed.
Frequently Asked Questions
1. Why did Adobe want to acquire Figma?
Adobe wanted to strengthen its position in collaborative digital design and potentially combine Figma’s browser-based collaboration capabilities with Adobe’s broader creative software ecosystem.
2. How much was the Adobe-Figma acquisition worth?
The proposed acquisition was valued at approximately $20 billion.
3. Why did Adobe not acquire Figma?
The deal faced extensive regulatory scrutiny over potential competition concerns. Adobe and Figma ultimately ended the transaction on December 18, 2023, after determining that they no longer saw a path toward regulatory approval.
4. Which regulators investigated the Adobe-Figma deal?
The UK’s Competition and Markets Authority investigated the transaction and referred it for an in-depth Phase 2 review. The European Commission also examined the transaction.
