Dynamic Competition within the Tech sector - Transaction uncertainty?

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.


This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2024.



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