Adobe Trying to Win Over Authorities on Figma Deal, CEO Says
(Bloomberg) -- Adobe Inc. Chief Executive Officer Shantanu Narayen said the company is still working to convince authorities that its purchase of design startup Figma Inc. isn’t anticompetitive, even as regulators prepare a lawsuit to block it.
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“At this point, we are focused on continuing to impress upon the authorities why this is good,” Narayen said in an interview with Bloomberg Television from a company conference in Las Vegas. “We are confident about the deal terms.”
Adobe is counting on Figma to help to expand its web-based offerings and make inroads with product designers and nonprofessionals. But antitrust enforcers are concerned about the creative software behemoth gobbling up even more of the industry. Justice Department regulators have been preparing a lawsuit to try and block Adobe’s $20 billion Figma takeover, Bloomberg reported in February.
Adobe argues that the acquisition isn’t anticompetitive because Figma isn’t a rival of its most important products, such as Photoshop. And Adobe’s product design offering, XD, doesn’t have a significant share of the market. Narayen also said that the company’s upbeat earnings last week show that the deal was made from a position of strength.
Even so, regulators are taking a tougher line on tech mergers in general. That includes cracking down on situations where targeted companies could grow into future competitors.
Such an argument was made in the Federal Trade Commission’s failed challenge to Meta Platforms Inc.’s purchase of virtual-reality startup Within Unlimited. The agency’s effort to stop Microsoft Corp.’s acquisition of Activision Blizzard Inc. is being made on similar grounds as well.
In prepared remarks for the earnings call last week, Narayen said the company is prepared for a Justice Department challenge. The deal is also being reviewed in the UK and European Union, where it is still in the pre-notification stage, Adobe General Counsel Dana Rao said earlier this week. And the so-called nascent competitor theory “hasn’t really been tested in court,” he added.
Adobe unveiled artificial intelligence tools at its conference, aiming to professionalize the fast-moving technology. The company’s new Firefly image generating system is meant to be safe for commercial use. It avoids plagiarism and offensive content by training the system on carefully picked imagery.
“Other companies have not been as strict or as diligent about ensuring the content they use to train the models,” Narayen said.
--With assistance from Leah Nylen.
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