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Adobe-Figma deal draws antitrust scrutiny from US Justice Department

Date: November 04, 2022 Meghna Singh Meghna Singh
Adobe-Figma deal draws antitrust scrutiny from US Justice Department 
The United States Department of Justice (DOJ) is reportedly preparing for an in-depth investigation into Adobe's $20 billion Figma takeover deal, claim sources familiar with the matter.



According to reports, the Justice Department has been contacting the two firms’ competitors and customers, as well as Figma’s venture capital investors in recent weeks.



One source added that the DOJ also issued civil investigative demands, which is an unusual move at such an early stage of the probe.



The probe will be the latest in a string of actions from the DOJ and the Federal Trade Commission inspecting the market power of some of the largest global tech firms.



With lawsuits against Google and Meta already making their way through court, and Amazon and Apple investigations currently underway, regulators are now looking into Adobe, which boasts of a $140 billion valuation and is by far the leading market leader in digital design tools.



Adobe announced its deal to acquire the design collaboration firm Figma earlier in September this year, which drew much scrutiny from the latter’s users. One of the major concerns was that Adobe would raise Figma’s prices and affect innovation in the sector.



However, Adobe stated that it is not planning to increase prices and will continue offering a ‘freemium’ version of Figma.



According to the sources, the deal, which was announced on 15th September, is still under a review period as designated by law. The DOJ also has the authority to launch a longer, optional review period if it finds that the deal is harming competition.



Although Figma is not a direct competitor to Adobe and its products like Photoshop or Indesign, it was able to surpass its collaboration software for designers, Adobe XD.



According to Tadhg McCarthy, Chief Design Officer at Elsewhen, Adobe is likely trying to get rid of the competition, which he believes will lead to less innovation.



It is expected that the DOJ will also look into Adobe’s past acquisitions along with the current merger.



According to Pablo Ruiz-Múzquiz, CEO of Penpot, a direct competitor to Figma, the deal will ensure Adobe of facing little competition in the coming several years.



Source credit: https://www.politico.com/news/2022/11/02/doj-review-adobe-20-billion-figma-deal-00064671

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Meghna Singh

An English Literature graduate, Meghna Singh ventured into the profession of content development to incorporate her knack for writing articles across verticals including technology, healthcare, business, and alike for News Origins and Newsorigins. She has also completed her MBA in Tourism and worked as a content creator in the field of product development.