Sources: Adobe's proposal to address EU and UK regulator concerns for its $20B Figma deal may include not tying Figma into Creative Cloud and divesting Adobe XD
Context & Ripple Effects
The proposed concessions follow a UK review focused on whether the transaction could curb innovation and raise costs, and an EU process that had moved toward a detailed investigation. The shift from initially offering no remedies to discussing possible competition concessions shows how far the review had progressed.
The remedy package targets the overlap regulators appear to see between Adobe’s design software and Figma, rather than simply seeking approval on the original terms. It also foreshadows the deal’s later termination after regulators found no clear approval path.
First-order effects
- Adobe would preserve Figma’s separation from Creative Cloud and may have to sell Adobe XD, limiting the product-integration and portfolio-expansion benefits it sought from the acquisition.
- Figma customers and competing design-tool providers would retain a more independent Figma offering if the proposed commitments were accepted.
Second-order effects
- EU and UK regulators would have a concrete structural and behavioral remedy package to assess, rather than judging the merger only as an all-or-nothing combination.
- A sale of Adobe XD could create an opening for a buyer to compete in the design-tool market, while Adobe would need to make its case without relying on bundling Figma into Creative Cloud.
Third-order effects
- The case suggests that regulators may scrutinize acquisitions of adjacent creative-software platforms not just for current product overlap, but for how bundles and product roadmaps could reshape competition.
- If this approach persists, large software acquirers may need to plan for divestitures or limits on ecosystem integration earlier in cross-border deal negotiations.
The trend: Creative-software consolidation is facing more demanding scrutiny of bundling, platform independence, and the preservation of future competition.