Following its phase two investigation, the Competition and Markets Authority (CMA) has provisionally found that Adobe’s deal to buy Figma would likely harm choice and innovation in digital design software.

The inquiry is the latest in a series of actions undertaken by the CMA, and led by an independent group, amid concerns that the deal could negatively impact the UK’s digital design sector.

Its new, more in-depth investigation finds the deal would eliminate competition between Figma, the world’s leading provider of product design software, and Adobe, one of the firm’s main competitors in this area.

The regulator discovered that around 80% of the professional product design market uses Figma’s software to deliver contemporary websites and apps, and provisionally concluded that the deal would remove the need for Adobe to innovate with AdobeXD, its existing product design offering.

Further, the group tentatively concluded that Adobe stopped development on new product design software, and which could have competed more closely with Figma, as a consequence of the prospective merger.

Adobe is also the largest supplier of image editing and illustrator software with its Photoshop and Illustrator products. The inquiry group found that Figma is a credible future competitor in this area, and that if the deal went ahead, competition between the two organisations wouldn’t occur and innovation wouldn’t happen as a result.

The CMA will now consult on the provisional findings, alongside considering potential solutions to the concerns. This includes outright blocking the deal.

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Margot Daly, chair of the independent group conducting the latest investigation, said: “The digital design sector is worth nearly £60 billion to the UK – representing 2.7% of the national economy – and employs over 850,000 people in highly skilled work. The software this sector uses is pivotal to its success, so the CMA has from the outset been very focused on ensuring this merger doesn’t adversely affect such an important part of the UK economy.

“Adobe and Figma are two of the world leading providers of software for app and web designers and our investigation so far has found that they are close competitors.

“This proposed deal, therefore, has the potential to impact the UK’s digital design industry by reducing choice, innovation and the development of new competitive products.

“Today’s decision is provisional, and we will now consult on our findings and listen to any further views before reaching a final decision.”