Adobe is, unsurprisingly, standing its ground after the UK’s competition watchdog slammed the brakes on its $20 billion plan to purchase the cloud-based product design platform Figma. Last month, the Competition and Markets Authority (CMA) provisionally determined that the deal would harm the product design software market should it go ahead — effectively blocking the acquisition until Adobe addressed the regulator’s concerns, which involves the divestiture of “overlapping operations” like Figma Design and the company’s competing Adobe XD app.
A response to the CMA’s request for remediations, dated December 14th, was published on the Authority’s website on Monday. In short, Adobe is refusing to make any of the suggested compromises to ease the CMA’s concerns, saying a divestment is “wholly disproportionate.” Adobe said in the statement that it disagrees with the CMA’s findings, and that “no remedy package that preserves the benefits of the transaction will be sufficient to resolve the competition concerns.”
The CMA’s recommendations don’t leave Adobe much wriggle room: either Adobe has to sell off Figma Design — Figma’s main product offering and, likely, the biggest motivation behind Adobe’s merger bid — or the deal is blocked entirely.
Adobe provides several counter-arguments against the CMA investigation within the document. One point, referencing Meta’s attempt to acquire the popular GIF platform Giphy which was also blocked by the CMA, claims that mergers being disapproved can reduce innovation and prevent smaller companies from flourishing under the wing of larger corporations.
A hearing is scheduled between the CMA and Adobe on December 21st — the same deadline for Adobe to offer remediations — with a final deadline of February 25th for the agency to make a decision on whether to officially block the merger.