In a nutshell: Figma is a recently incorporated company providing a web-based interface design platform focusing on real-time collaboration. Adobe was pursuing an acquisition of its most intriguing competitors in years, but the attempt ultimately failed due to antitrust scrutiny in the Europe.

Adobe has lost interest in acquiring Figma. The company was willing to pay $20 billion to buy the product design startup, but regulatory watchdogs from the EU and UK opposed the deal. Antitrust laws are designed to preserve market competition, but Adobe said that the proposed remediations were unacceptable and "wholly disproportionate."

Adobe and Figma negotiated the deal during the COVID-19 pandemic, significantly increasing worldwide technology and software investment. The potential deal was eventually announced in September 2022, revealing that Adobe was willing to pay 50 times Figma's annual recurring revenue and double the company's latest private funding round in 2021.

Since the announcement, the two companies have fought battles on multiple fronts, with antitrust authorities trying to halt the sale. The European Commission believed the merger could "significantly reduce" competition in global markets. The EU's Competition Commissioner Margrethe Vestager said the Figma acquisition would have prevented "all future competition" between the two companies, leading to less choice, reduced quality, and higher costs for consumers.

The UK Competition and Markets Authority (CMA) was equally concerned with Adobe's proposal. The agency proposed alternative "remedies" in November, forcing Adobe to abandon the deal or eliminate overlapping business products such as Illustrator or Photoshop. Alternatively, the CMA could have forced Figma to sell off its core product, Figma Design, under the proposal.

Figma CEO Dylan Field told the Financial Times that the suggestion of "buying a company so that you can divest the company" was "quite amusing." Reading the CMA proposal was like reading a punchline to a joke, Field said. Figma's boss was disappointed with the outcome. The situation ultimately forced Adobe to abandon the acquisition as there was "no clear path" to satisfy UK or EU regulators' conditions for approval.

Provisional findings from the CMA contained "serious errors of law and fact," Adobe and Figma said. Regulators were influenced by an "irrational approach" to the gathering and appraisal of evidence. Officials required divestment of a multibillion-dollar business (Photoshop, Illustrator) to address an "uncertain and speculative" theory of harm to competition, a wholly disproportionate reaction to the now-failed deal.