Adobe could face legal action over $20bn Figma deal
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Adobe’s $20 billion deal to acquire Figma could be about to hit another roadblock, with whispers of a legal challenge from the US Department of Justice (DoJ).
Insiders close to proceedings told Bloomberg News (opens in new tab) the DoJ is preparing an antitrust lawsuit for the coming months. Under condition of anonymity, a second mole confessed that the DOJ and Adobe were in talks.
In Europe, EU watchdogs and the UK’s Competition and Markets Authority are also looking closely at the details of the merger, which is expected to complete this year. Adobe continues “constructive and cooperative discussions with regulators in the US, UK and EU among others,” a spokesperson said.
Adobe and antitrust
Adobe announced it’s intention to buy the popular web development tool in September to a somehwata mixed response.
Some on Wall St were concerned over that $20bn bill, while creatives feared Adobe’s takeover could see the mockup software gutted as its best parts make their way into other Adobe products. .
For Adobe, the acquisition aligns with recent attempts to streamline and simplify graphic design software for a broader audience, including a big push with the web-based Adobe Express. By acquiring the UI design firm, the company adds another string to its bow – and another revenue stream.
The DoJ’s antitrust lawsuit would block the deal – at least until it can be established whether the controversial merger gives Adobe an unfair edge.
Antitrust laws are designed to stop one company (or a cartel of companies) dominating an industry, operating unfairly, and reducing competition. Effectively, the bigger a company grows, the more firms it can buy, the less competition there is. For consumers, that risks fewer choices and higher prices.
With the company already dominating in fields like web design software and photo editors, the DoJ wants to prevent Adobe monopolizing the creative apps space.
This isn’t the first antitrust lawsuit Adobe has faced – but challenge seems par for the course for the recently re-energised DoJ, which is also doggedly pursuing Google through the courts over an alleged monopoly over digital ad technology.
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