Adobe abandoned its proposed acquisition of Figma on December 18, 2023, following the UK Competition and Markets Authority's (CMA) provisional findings that the merger could lead to a significant loss of competition. The CMA applied the theory of dynamic competition, focusing on Adobe's perceived threat from Figma.
The EU had similar concerns, labelling it a "reverse killer acquisition." The decision underscores the importance of considering dynamic competition in mergers, as demonstrated in the CMA's assessment, aligning with a broader trend by competition authorities around the world. Parties to a transaction where the issue of dynamic competition is relevant, which is most likely in the technology sector, would do well to study the CMA's findings.
A review of the CMA's findings forms an article by this author, which will shortly be published in the journal European Competition and Regulatory Law Review.
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