Adobe and Figma hold talks with DOJ antitrust leaders to salvage deal.

The exact contours of a potential case could not be learned, but Figma has long positioned itself as a competitive threat to Adobe, and DOJ prosecutors are concerned the deal could squash that competition, POLITICO previously reported.

The 41-year-old Adobe is a Silicon Valley stalwart and a highly acquisitive company, having purchased most of its marquee products such as Photoshop. Both the DOJ antitrust division and its sister agency, the Federal Trade Commission, have taken an aggressive stance against dealmaking, scrutinizing both current and past acquisitions by the technology giants. Facebook’s 2012 and 2014 purchases of Instagram and WhatsApp, and Google’s myriad deals in the digital advertising industry are core parts of ongoing litigation and investigations of the companies.

Spokespeople for Adobe and Figma did not immediately respond to requests for comment. The DOJ declined to comment.

The final decision and timing of any case is complicated by ongoing reviews by the European Commission and the U.K.’s Competition and Markets Authority. The companies had a closed-door hearing on Dec. 8 before the commission, and have a Dec. 21 deadline to make a settlement offer.

The European Commission said the deal would be a “reverse killer acquisition” as Adobe would likely discontinue its own design tool. It also said the transaction would eliminate Figma as a rival for two of Adobe’s editing tools and end its chances of becoming an effective competitor.

The EU has a Feb. 5 deadline to make a decision.

The U.K. in late November issued preliminary objections to the deal and has until Feb. 25 to make a final decision. The CMA said the deal would reduce innovation and eliminate competition in the market for digital design tools.

Adobe announced its deal for Figma in mid-September 2022. Figma users were quick to voice concerns. Chief among those issues is that Adobe will raise prices for Figma, an upstart competitor, while innovation slows to a crawl. For its part, Adobe said it does not plan to raise prices and will continue offering a so-called freemium version of Figma.

The Department of Justice (DOJ) is reportedly considering filing a lawsuit to block Adobe’s acquisition of design software company Figma. The DOJ is concerned that the deal could stifle competition, as Figma has been seen as a strong competitor to Adobe. The DOJ’s antitrust division, along with the Federal Trade Commission, has been taking a tough stance on dealmaking by scrutinizing acquisitions made by technology giants. Both Adobe and Figma have not responded to requests for comment, and the DOJ declined to comment. The final decision on the case and its timing will be influenced by ongoing reviews by the European Commission and the UK’s Competition and Markets Authority. The European Commission has described the deal as a “reverse killer acquisition” that would eliminate Figma as a rival and hinder its chances of becoming a competitor to Adobe. The EU has until February 5 to make a decision, while the UK has until February 25. Adobe announced the acquisition in September 2022, and concerns have been raised by Figma users who fear increased prices and slower innovation under Adobe’s ownership. Adobe has stated that it does not plan to raise prices and will continue offering a free version of Figma.

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