The US Department of Justice is asking Adobe for information on its $20 billion purchase of Figma • The Register

The Justice Department is scrutinizing Adobe’s ridiculously expensive purchase of web-first collaborative design startup Figma after issuing a second information request to the couple.

Announced in September, the $20 billion cash and stock acquisition sent some corners of the creative industry into a meltdown amid concerns that Adobe will merge the new toy with its XD software and drive up the price list.

According to some reports, the DoJ has spent time contacting Figma’s customers, competitors and venture capitalists to offer views on the sale pending a possible antitrust investigation.

Adobe said so in a filing with the Securities and Exchange Commission (SEC) this week, and Figma filed a notification and reporting form with the DoJ and the Federal Trade Commission in October regarding the Hart-Scott-Rodino Antitrust Improvements (HSR ) Act One 14. These are documents that must be filed and approved before any merger, acquisition or transfer of securities and assets can be completed.

“On November 14, 2022, the parties received a request for additional information and documentation (a ‘Second Request’) from the DoJ relating to the Transaction,” Adobe announced in the SEC filing.

Therefore, the sale may only be completed 30 days after Adobe and Figma have responded with additional data or answers to questions. The filing states, “The HSR Waiting Period will expire 30 days after Adobe and Figma each certify their material compliance with the Second Application, unless earlier terminated by the DOJ or extended by agreement of the parties or court order.”

If the DoJ and FTC aren’t satisfied with the responses, they could take antitrust action, including requiring them to divest significant assets of the two companies and asking them to license assets or terminate the agreement.

Regulators in other regions may also choose to scrutinize the $20 billion sale, which would be among the largest takeovers by a private software developer.

Figma is a browser-based app designed to manage file organization by displaying projects and their files in a special format. There is no installation, no patching and no updates. It is a vector based graphics editor and prototyping tool. The company was founded in 2016 and has raised $332.9 million in funding to date.

It has an estimated 4 million users, some of whom are drawn in by its freemium pricing and relatively light interface. In contrast, Adobe has more than 9,900 companies using XD, its competitor software.

Some users worry that Adobe will combine the two and increase subscription costs, which Figma co-founder Dylan Field says isn’t happening, and that the platform will remain free for educational users.

Should the deal not go through, Adobe Figma may have to pay a $1 billion termination fee under certain conditions. ®