Adobe, Figma meet with DOJ antitrust leadership in bid to save deal

Executives and lawyers for Adobe and Figma, known for its online collaboration tool popular with designers, met Thursday with senior Justice Department officials as part of a late-stage effort to secure approval in the U.S. for their $20 billion deal, according to two people with direct knowledge of the matter.

No final decision has been made on whether to bring a case, the people said, with one of the people stressing that it was not a so-called “last rites” meeting. Typically, such meetings with DOJ leadership — in this case Assistant Attorney General Jonathan Kanter — are one of the final steps before a lawsuit is filed.

It is a sign however that the DOJ is strongly considering a challenge to the deal. Justice Department litigation counsel recently joined the team investigating the acquisition, the people said.

The exact contours of a potential case could not be learned, but Figma has long positioned itself as a competitive threat to Adobe, and DOJ prosecutors are concerned the deal could squash that competition, POLITICO previously reported.

The 41-year-old Adobe is a Silicon Valley stalwart and a highly acquisitive company, having purchased most of its marquee products such as Photoshop. Both the DOJ antitrust division and its sister agency, the Federal Trade Commission, have taken an aggressive stance against dealmaking, scrutinizing both current and past acquisitions by the technology giants. Facebook’s 2012 and 2014 purchases of Instagram and WhatsApp, and Google’s myriad deals in the digital advertising industry are core parts of ongoing litigation and investigations of the companies.

Spokespeople for Adobe and Figma did not immediately respond to requests for comment. The DOJ declined to comment.

The final decision and timing of any case is complicated by ongoing reviews by the European Commission and the U.K.’s Competition and Markets Authority. The companies had a closed-door hearing on Dec. 8 before the commission, and have a Dec. 21 deadline to make a settlement offer.

The European Commission said the deal would be a “reverse killer acquisition” as Adobe would likely discontinue its own design tool. It also said the transaction would eliminate Figma as a rival for two of Adobe’s editing tools and end its chances of becoming an effective competitor.

The EU has a Feb. 5 deadline to make a decision.

The U.K. in late November issued preliminary objections to the deal and has until Feb. 25 to make a final decision. The CMA said the deal would reduce innovation and eliminate competition in the market for digital design tools.

Adobe announced its deal for Figma in mid-September 2022. Figma users were quick to voice concerns. Chief among those issues is that Adobe will raise prices for Figma, an upstart competitor, while innovation slows to a crawl. For its part, Adobe said it does not plan to raise prices and will continue offering a so-called freemium version of Figma.