Adobe remains the leading company in editing software, and with the proposed merger with Figma, it could dominate the product design software market. However, that's the very thing regulators are wary of, leading them to challenge the acquisition.
Adobe, Figma Merger Called Off
The editing software giant's acquisition plans had much potential and could've pushed its software to a new level. However, UK and EU regulators are concerned about the market power it could lead to and the threat it can pose to competition.
The deal was first announced back in September 2022, and designers immediately expressed concerns. Regulators said that Adobe might harm innovation by not allowing Figma's design platform to flourish independently, which was proving to be more popular than Adobe XD, as reported by The Verge.
Feeling the pressure from it, Adobe finally decided that the merger was no longer a good plan and abandoned the deal. Although both companies disagree with regulator findings, Adobe CEO Shantanu Narayen said that it was better to "move forward independently."
In addition to that, Narayen expressed that while Adobe and Figma shared a vision to jointly redefine the future of creativity and productivity, they "continue to be well positioned to capitalize on our massive market opportunity and mission to change the world through personalized digital experiences."
Both companies have already been working with regulators to make sure that the merger goes through as planned, but Figma CEO Dylan Field stated that even then, they "no longer see a path toward regulatory approval of the deal."
The downfall of the acquisition likely started when Adobe rejected the suggestions brought forth by the Competition and Markets Authority (CMA) in the UK, which could've prompted an antitrust investigation.
The European Commission had similar plans but eventually dropped the investigation after Adobe announced the termination of the deal. Due to the cancelation, Adobe will pay Figma $1 billion in cash for a reverse termination fee.
Adobe Continues to Innovate
Despite the major setback it went through with the Figma merger, Adobe will still be one of the leading design software companies in the market. In fact, it had just released an update to its Spectrum design system, calling it Sprectrum 2.
The company claims that the update would "make Adobe tools even more intuitive, inclusive, and joyful to use across platforms, while supporting our mission of enabling Creativity for All," as reported by Tech Crunch.
The three areas that were impacted most by the update were dynamic contrast and brightness, more accessible colors, and attention hierarchy to prioritize specific visual elements, which would be dedicated to newer audiences of its products.
Adobe Vice President of Design, Eric Snowden says that the new Adobe wants to reach a wider market which includes students, social content creators small business owners, and more. Spectrum 2 will start rolling out by early 2024.
The first Adobe products that will see the updates will be the web apps which will be followed by various tools like Photoshop, Lightroom, and Premiere Pro. Eventually, it will roll out to over 100 apps from the company.
