UK competition regulator finds Adobe’s purchase of Figma could reduce innovation(gov.uk)
gov.uk
UK competition regulator finds Adobe’s purchase of Figma could reduce innovation
https://www.gov.uk/government/news/design-software-deal-could-harm-uk-digital-economy
77 comments
I tried uninstalling Adobe software from my PC a few weeks ago.
Clicking on ‘uninstall’ booted up their cloud launcher app, and then I had to log in with an account, and then it had to install four or five different updates in sequence, and then it tried auto-updating the software I had installed, and after about thirty minutes of making sure Adobe obtained all of their analytics I was finally able to uninstall everything.
It is one of the worst user experiences I’ve ever encountered in recent times and it is a sign of what will happen to Figma under Adobe’s leadership. Figma is too much of a threat to them, so they can just squash it in an acquisition.
The revamped Serif suite is much nicer.
Clicking on ‘uninstall’ booted up their cloud launcher app, and then I had to log in with an account, and then it had to install four or five different updates in sequence, and then it tried auto-updating the software I had installed, and after about thirty minutes of making sure Adobe obtained all of their analytics I was finally able to uninstall everything.
It is one of the worst user experiences I’ve ever encountered in recent times and it is a sign of what will happen to Figma under Adobe’s leadership. Figma is too much of a threat to them, so they can just squash it in an acquisition.
The revamped Serif suite is much nicer.
I own all the Serif products and love the company, but have to say v2 is so buggy on windows still. I hear it's better on mac, though I've had it crash on iOS a few times. I've gone back to mostly using designer v1.
Adobe, Netflix, Google, etc.
They all need to realise one thing. You can choose to start something, but it's only the audience that can choose to end it.
Whether that's a new app, series, or web tool: the problem is the same, no one is going to invest their time and effort on something that will be canned if it is not an instant success.
Each are now trapped in a problem of their own making: people avoid their new offerings for fear of wasting their time, dooming the new entry.
They all need to realise one thing. You can choose to start something, but it's only the audience that can choose to end it.
Whether that's a new app, series, or web tool: the problem is the same, no one is going to invest their time and effort on something that will be canned if it is not an instant success.
Each are now trapped in a problem of their own making: people avoid their new offerings for fear of wasting their time, dooming the new entry.
We need a term for it - the fear of adopting something because it might be cancelled based on past history leading to the cancellation further confirming that these companies would cancel new products.
The word Google has already been used as a noun, so we could slightly repurpose it and use it again.
E.g. “That Netflix show is fantastic but I wouldn’t bother starting it as it got Googled at the end of the first season.”
Or:
“Google’s new messaging service looks cool but I’m not going to get everyone to use it as I bet they’ll only go and Google it in about 18 months.”
E.g. “That Netflix show is fantastic but I wouldn’t bother starting it as it got Googled at the end of the first season.”
Or:
“Google’s new messaging service looks cool but I’m not going to get everyone to use it as I bet they’ll only go and Google it in about 18 months.”
This is absolutely right, and why their new dev tools feature add an additional $25 per seat to use.
Even though I would rather pay less — if the integration between a Design System and Github is clean enough it might be worth it for my DSM team? It's real value. It's also why they launched Figjam — which has gotten Miro off of my balance sheet.
I want Figma to scale up and be the anti-Adobe. Financial balance of Figma aside - this acquisition kinda sucks.
Even though I would rather pay less — if the integration between a Design System and Github is clean enough it might be worth it for my DSM team? It's real value. It's also why they launched Figjam — which has gotten Miro off of my balance sheet.
I want Figma to scale up and be the anti-Adobe. Financial balance of Figma aside - this acquisition kinda sucks.
They're also continuing to cripple free seat functions.
They also recently got rid of most of the free tier. Many files I had from years of use gone overnight without warning. I used the free version as a personal depository for files, I made using the pro version paid for by my employers.
I interned at the CMA in 2014 and had several friends working on merger control.
This [1] page has more details on the case, and has an invitation to comment at the bottom. In my experience, detailed comments from relevant industry participants, e.g. customers, competitors, are given serious weight and consideration, and very few are supplied. It's a useful mechanism for those concerned about a tech merger.
"Invitation to comment: closes on 18 May 2023 3 May 2023: The Competition and Markets Authority (CMA) is considering whether it is or may be the case that this transaction if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.
To assist it with this assessment, the CMA invites comments on the transaction from any interested party.
These comments should be provided by the deadline set out above.
Contact Please send written representations about any competition issues to:
[email protected]"
Other cases can be found here [2].
[1] https://www.gov.uk/cma-cases/adobe-slash-figma-merger-inquir...
[2] https://www.gov.uk/cma-cases?case_type%5B%5D=mergers&market_...
This [1] page has more details on the case, and has an invitation to comment at the bottom. In my experience, detailed comments from relevant industry participants, e.g. customers, competitors, are given serious weight and consideration, and very few are supplied. It's a useful mechanism for those concerned about a tech merger.
"Invitation to comment: closes on 18 May 2023 3 May 2023: The Competition and Markets Authority (CMA) is considering whether it is or may be the case that this transaction if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.
To assist it with this assessment, the CMA invites comments on the transaction from any interested party.
These comments should be provided by the deadline set out above.
Contact Please send written representations about any competition issues to:
[email protected]"
Other cases can be found here [2].
[1] https://www.gov.uk/cma-cases/adobe-slash-figma-merger-inquir...
[2] https://www.gov.uk/cma-cases?case_type%5B%5D=mergers&market_...
Thank you, I’ve provided some feedback.
You're about a month and a half too late. The request for comments ended on May 18.
Yeah my comment wasn’t that clear but I was encouraging people to comment on future tech mergers.
oh dear
Interesting. Right now Figma is THE standard for UX design. It completely blew Sketch away thanks to Covid. I really haven't heard UX designers talk about going back to Sketch or any other program, in fact I've only heard multiple people talk about how Figma is just getting better with their new update (especially around prototyping). Personally, I'm not a fan of Adobe, but it seems like there's a lot of UX designers who simply don't care if Adobe buys them or not.
Until they find Figma will either disappear or get more expensive under adobe.
They’ll just add it to their subscription service.
And probably rename it Figma XD Max Pro.
And probably rename it Figma XD Max Pro.
They’ll just roll it into their Creative Cloud sub.
Probably.
It will replace XD.
Probably.
It will replace XD.
I love sigma and have been using it for years, but I'm already starting to look for alternatives. They've already made some changes to free versus premium tiers and anyone who trusts Adobe is an absolute fool. I've moved away from all of their products entirely with the exception of Figma.....for now.
I think many Figma users are concerned with Adobe's purchase of Figma. I've already removed Adobe products twice from my life (professional and personal) and would prefer to not have to do it again.
That said, I can't see the acquisition being a problem for competition in this particular space. It's not hard to imagine someone just making figma-but-different and becoming the next big thing. There are also countless other existing options.
That said, I can't see the acquisition being a problem for competition in this particular space. It's not hard to imagine someone just making figma-but-different and becoming the next big thing. There are also countless other existing options.
It would be very hard to build a product from scratch that competed with Figma. Even if you just straight-up stole all their product choices, features and UX and so on, the engineering under the hood seems pretty high level. Anything is possible, but it would not be trivial.
Figma started in 2016 and competed against giant companies (like Adobe) who had been around for decades, and did extremely well. The competition in this space is never ending. They just keep coming. The competition regulators seem to consistently misunderstand the industries they are regulating.
Small startups these days regularly train cutting edge LLMs. I don't think Figma is that far out-of-reach.
Training LLM and developing webgl app that works like magic on any devices with no visible performance problems on any level of zoom, dynamic, interactive, smart, lightweight is totally different level of engineerinf skill requirements.
Training LLM is like a child play compared to it.hack , even NEETs from 4chan are training erotic roleplay LLM for fun.
Training LLM is like a child play compared to it.hack , even NEETs from 4chan are training erotic roleplay LLM for fun.
Like what? In my neck of the woods, everyone uses Figma, XD or Sketch.
The way out: https://penpot.app/
Sketch exists, too. https://www.sketch.com/
It's opensource but performance wise is really bad due to SVG instead of webgl.
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They were losing the battle for the design software market, so they bought the competition. The less innovative company bought the more innovative company. Of course it would reduce innovation.
Some people argue this acquisition opens the door for a new company to make another, newer, better version of Figma because Adobe could screw it up.
Ie, they are driving innovation by killing the leader.
Ie, they are driving innovation by killing the leader.
They did this before with at least Aldus and Macromedia.
although they genuinely killed Quark Xpress by making a better product with Indesign.
Whilst Quark totally dropped the ball and failed to innovate and update for modern MacOS.
Quark had as good as a 100% of the market before InDesign came along.
Whilst Quark totally dropped the ball and failed to innovate and update for modern MacOS.
Quark had as good as a 100% of the market before InDesign came along.
If you make it harder for startups to achieve profitable exits does that incentivize or disincentivize innovation?
In my person opinion, in the grand scheme of things, the impact on innovation in this particular case is negligible because only under exceptional circumstance, anti trust regulators intervene to block a merger of a startup.
If it becomes more of a common occurrence, I agree it could stifle innovation.
If it becomes more of a common occurrence, I agree it could stifle innovation.
On the contrary, the ability for startups to be purchased by larger companies is the majority of the financial incentive towards creating startups. If competition regulators prohibit these transactions, it will harm the startup ecosystem and reduce innovation.
This argument makes absolutely no sense to me.
The large tech acquirers have extremely high market valuations partly because of the expectation that they continue to get away with doing exactly this.
If we had more competent competition regulators and this sort of acquisition was basically not on the cards at all, ever, once a company reaches a certain size then that value would stay in the innovating startups until they IPO or are acquired by a smaller, less predatory/monopolistic company. Either way there’s still an attractive exit.
We need to stop inventing reasons to tolerate and justify this behaviour that is clearly bad for society and start pushing for a more diverse tech ecosystem with proper antitrust enforcement.
The large tech acquirers have extremely high market valuations partly because of the expectation that they continue to get away with doing exactly this.
If we had more competent competition regulators and this sort of acquisition was basically not on the cards at all, ever, once a company reaches a certain size then that value would stay in the innovating startups until they IPO or are acquired by a smaller, less predatory/monopolistic company. Either way there’s still an attractive exit.
We need to stop inventing reasons to tolerate and justify this behaviour that is clearly bad for society and start pushing for a more diverse tech ecosystem with proper antitrust enforcement.
I don't want to get into an argument with you and didn't explain the argument very well, however, it's not as if I'm just coming up with weird opinions on my own here.
The basis of my argument comes from the director of competition policy at the International Center for Law & Economics, who explains it all in depth here: https://www.ft.com/content/b7fdbb35-e104-47bf-9e03-ef5d8b324...
The basis of my argument comes from the director of competition policy at the International Center for Law & Economics, who explains it all in depth here: https://www.ft.com/content/b7fdbb35-e104-47bf-9e03-ef5d8b324...
> Moreover, start-ups depend on acquisitions. Along with
> an initial public offering, being bought is the main
> way entrepreneurs and venture capital investors can
> “exit” the firms they have built. The harder it is to
> sell your company, the harder it is to make a
> return. Fifty per cent of US start-up executives said
> that being acquired was a long-term goal, and 90 per
> cent of US start-up exits in 2008-18 happened thanks
> to acquisitions.
>
> Empirical evidence suggests investment in start-ups is
> sensitive to rules on acquisitions. One paper found
> venture capital activity grows by about 40-50 per cent
> in countries that enact pro-takeover laws, and US states
> that introduced anti-takeover laws saw a 27 per cent
> decline in VC investment deals compared with those that
> did not.Interesting and fair enough, certainly should be a consideration.
Obviously it's easy to think of laws that could be enacted that would make founding a startup more attractive and increase the number of startups and amount of investment in them that everyone would agree would still be bad and shouldn't exist.
This is obviously not such a clear case, but I personally fall on the side that reducing startup formation/investment would be an ok price to pay here.
I have some (but not 100%) confidence that this could mostly or entirely be offset by other improvements such as making going public easier for smaller companies (perhaps similar to London's AIM for example) or creating market/tax incentives that favour startups and smaller companies, and/or penalise companies that become larger, especially by acquiring other companies or entering many relatively unrelated/independent verticals.
Obviously it's easy to think of laws that could be enacted that would make founding a startup more attractive and increase the number of startups and amount of investment in them that everyone would agree would still be bad and shouldn't exist.
This is obviously not such a clear case, but I personally fall on the side that reducing startup formation/investment would be an ok price to pay here.
I have some (but not 100%) confidence that this could mostly or entirely be offset by other improvements such as making going public easier for smaller companies (perhaps similar to London's AIM for example) or creating market/tax incentives that favour startups and smaller companies, and/or penalise companies that become larger, especially by acquiring other companies or entering many relatively unrelated/independent verticals.
> This argument makes absolutely no sense to me.
There are some business models where acquisition is the only viable way to make money.
Deepmind, Shazam, and Giphy were largely valuable because they create value for other big tech companies with respect to customer acquisition, market positioning and intellectual property. These companies had limited ability to make profits on their own.
One can still argue though that such acquisitions are still against the public interest even if they’re helpful to a class of startups.
There are some business models where acquisition is the only viable way to make money.
Deepmind, Shazam, and Giphy were largely valuable because they create value for other big tech companies with respect to customer acquisition, market positioning and intellectual property. These companies had limited ability to make profits on their own.
One can still argue though that such acquisitions are still against the public interest even if they’re helpful to a class of startups.
>There are some business models where acquisition is the only viable way to make money.
Maybe so, but blocking a dominant company from buying out its closest competitor is not quite the same thing as banning all acquisitions.
Maybe so, but blocking a dominant company from buying out its closest competitor is not quite the same thing as banning all acquisitions.
Seems like companies that could have made money through licensing their product instead of being bought out?
The licensing would need to be exclusive and long term, otherwise the big tech companies would've (and should've) feared the risks of being deeply integrated and dependent on a third party.
Google would never have allowed a third party to use search results as training data, for example. Shazam might've had more flexibility unless Apple wanted to link it with customer data.
Exclusive long term licensing is effectively acquisition by another name.
Google would never have allowed a third party to use search results as training data, for example. Shazam might've had more flexibility unless Apple wanted to link it with customer data.
Exclusive long term licensing is effectively acquisition by another name.
>reduce innovation
Maybe the real innovation that we need is how to create companies that are designed to operate indefinitely as a going concern, breaking even or turning a profit without the need for an "exit" event.
Let's work on business fundamentals that aren't three financial engineering schemes in a trenchcoat, for once.
Maybe the real innovation that we need is how to create companies that are designed to operate indefinitely as a going concern, breaking even or turning a profit without the need for an "exit" event.
Let's work on business fundamentals that aren't three financial engineering schemes in a trenchcoat, for once.
Nature does not allow for solving anything “indefinitely”.
Restricting owners from being able to sell is an idea, although not sure it has enough merit, since society can benefit from businesses being able to be acquired. Perhaps the pendulum has tilted too far, or technology makes economies of scale too good to compete against.
Restricting owners from being able to sell is an idea, although not sure it has enough merit, since society can benefit from businesses being able to be acquired. Perhaps the pendulum has tilted too far, or technology makes economies of scale too good to compete against.
Or they could have focused on building a sustainable company that made a profit from the start and didn’t use VC money to essentially give the product away for free.
I was really unhappy about switching my design team to Figma because their only ways forward are to either IPO or get purchased, with all the pain they involve. Or worse, if they actually have to start making a profit, then prices will be raised immensely and features will be diminished.
None of those things lead to a stable platform to base on potentially years of work.
I was really unhappy about switching my design team to Figma because their only ways forward are to either IPO or get purchased, with all the pain they involve. Or worse, if they actually have to start making a profit, then prices will be raised immensely and features will be diminished.
None of those things lead to a stable platform to base on potentially years of work.
Out of curiosity, what were the alternatives to Figma you were looking at and were more in favour of?
Sketch doesn’t have all the features of Figma, but it is backed by a sustainable company who haven’t taken on vast amounts of funding.
We really needed the real-time collaboration features, which Sketch didn’t have at that time so we went with Figma. I was concerned that it only had a couple of years left in its current state, which sadly seems to be true.
Penpot is an interesting upcoming alternative, though it’s not ready for prime-time yet.
We really needed the real-time collaboration features, which Sketch didn’t have at that time so we went with Figma. I was concerned that it only had a couple of years left in its current state, which sadly seems to be true.
Penpot is an interesting upcoming alternative, though it’s not ready for prime-time yet.
I'm sure it will produce innovative business practices inflicted on a captive userbase.
How does it work if the UK blocks it and the rest of the world doesn't?
Possibly a spinoff organization like Figma UK Operations LTD that handles the UK business separately from Adobe.
I love figma, dislike the merger. Have hopes for this open source alternative https://penpot.app/.
You are saying without trying.Penpot can only compete in functionalities. Due to their architectural choices of using SVG ,no WebGL renderers, very resource intensive java backend they will never reach performance req of FIGMA.
Designing just a few screen is crippling it.
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Unsurprisingly. [0]
Did people here really think that the regulators are going to allow this merger to happen?
Adobe might as well pay the $1BN break up fee and the Figma will just use that to fund their IPO.
[0] https://news.ycombinator.com/item?id=33919862
Did people here really think that the regulators are going to allow this merger to happen?
Adobe might as well pay the $1BN break up fee and the Figma will just use that to fund their IPO.
[0] https://news.ycombinator.com/item?id=33919862
Figma has about $500M annual revenue, AFAICT.
In the current environment, money-losing software companies aren’t exactly hot. The valuation from an IPO would be extremely disappointing for investors compared to the $20 billion Adobe is paying. A price/sales multiple of 10x would be generous, and that would be a $5B valuation.
In the current environment, money-losing software companies aren’t exactly hot. The valuation from an IPO would be extremely disappointing for investors compared to the $20 billion Adobe is paying. A price/sales multiple of 10x would be generous, and that would be a $5B valuation.
Adobe's actually done investors a favour and made a realistic enterprise valuation of the company for everyone. If it's worth $20bn to them then it's not likely to float for $5bn. They clearly think there's value there or some kind of competitive advantage that makes the company worth that much.
The problem is that the company is worth $20 billion only to Adobe.
And that explains why antitrust authorities around the world are interested in this deal: that kind of discrepancy suggests a market distortion in progress.
And that explains why antitrust authorities around the world are interested in this deal: that kind of discrepancy suggests a market distortion in progress.
XD proved that Adobe doesn’t really care about the UX/UI design sector - Figma’s worth 20bn to Adobe to kneecap a potentially existential threat.
I did not want this to go through, but totally expected it since I’m in the US and until a few months ago it seemed our regulators no longer cared about monopolies
I wonder if Adobe will respond by saying the UK isnt a good place to invest in as well.
[deleted]
Lol now do Autodesk
If you want to talk about reducing innovation then have a look at Apple's walled garden. They're preventing so many innovative new apps from ever being created by being inaccessible to young/poor developers.
You can develop iOS applications for free?
This comment is so ironic because Apple has been the #1 innovator in so many arenas for decades.
This comment is so ironic because Apple has been the #1 innovator in so many arenas for decades.
Can I give it to my friend to try on his phone without jumping through a million hoops every week or so? Because I can just send him an apk file via whatsapp without paying anyone a dime.
Or let's take a step back: Can I develop the app without buying a $1000 macbook? You can develop for android using any platform. Apple's build tools are limited to only work on macos.
Or let's take a step back: Can I develop the app without buying a $1000 macbook? You can develop for android using any platform. Apple's build tools are limited to only work on macos.
While true, I think you need to make an argument that those issues are specifically anti-innovation.
Really tho I think we collectively use that term whenever it suits us, without much clarity on what innovative outcomes actually are. We need a better definition and better yardsticks.
Really tho I think we collectively use that term whenever it suits us, without much clarity on what innovative outcomes actually are. We need a better definition and better yardsticks.
Of course there are many different things that can aid or hurt innovation. I believe that one of the things that aids innovation is accessibility to a wide spread of developers of all ages, so measures that make this more difficult hurt innovation.
Adobe have already canned XD, which was a poor alternative to Figma, but Adobe had to at least pretend to compete.
Problem is, even though Figma have captured a large proportion of the digital design market, they took on so much funding that their only real options are a purchase or IPO.
I don’t believe that subscriptions alone would bring in enough for the kind of returns the VCs are looking for, especially as it’s almost free for individual designers.
And so the enshittification begins.