[HN Gopher] Uncle Sam to block Adobe absorption of Figma over mo...
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Uncle Sam to block Adobe absorption of Figma over monopoly fears
Author : grdeken
Score : 85 points
Date : 2023-02-27 20:56 UTC (2 hours ago)
(HTM) web link (www.theregister.com)
(TXT) w3m dump (www.theregister.com)
| merricksb wrote:
| * * *
| waprin wrote:
| In a vacuum I agree that acquisition looked anti-competitive.
|
| However, over time I'm very skeptical there's truly any
| monopolies in the tech industry.
|
| In the late 90s, early 2000 Microsoft was this unbeatable
| monopoly, so much they had to go to the Supreme Court. Then
| suddenly Google and Apple's resurgence made them feel barely
| relevant, and I personally don't think that was because of the
| outcome of that decision, it was because Microsoft got beat by
| Google on web experience and Apple on hardware experiences. When
| I was in undergrad, I remember Ubuntu #1 bug was Microsoft market
| share, it was the #1 bug because it was this huge impossible
| mountain to overcome, then one day you look at it and it seems
| silly and irrelevant.
|
| Just a few years ago Elizabeth Warren made breaking up Facebook a
| central part of her campaign. Now just a few years later I could
| legitimately believe that Facebook will be dead-ish in a decade.
| I used to check it frequently and knew many people who bashed it
| but frequently used it anyway. Now I barely use it and when I do
| it seems like a ghost town - and I'm someone who has spent 0 time
| on Tiktok. The idea that we need Congress to step in and stop
| Facebook from taking over the world seems laughable just a couple
| years later.
|
| Even the unstoppable Google is looking very frail on every front,
| notably on Search via ChatGPT but also Google for Work via
| Notion, etc
|
| If the feds wants to go after any monopoly, it feels it would
| have be the iOS App Store, you can't build a mobile app without
| building for iOS and Apple has it completely under their thumb.
| Europe has the right idea forcing Apple to allow alternative App
| Stores so users at least have an option of going out of their way
| to get an app that Apple didn't approve. I don't think big
| companies acquiring startups threatens competition so much as an
| entire critical distribution channel being locked down.
|
| In general, one thing I see over and over again in tech is people
| look at the present moment and assume it's a lot more static than
| it is. The world is very dynamic and the technology world 100x
| so. Adobe acquiring Figma does seem anti-competitive but there's
| probably a team of 3 people right now who just made the first
| commit of what will eventually become the Figma killer so it may
| not matter.
|
| We've seen cycle after cycle of unbreakable monopolies getting
| overturned by scrappy startups and it's hard to imagine that
| cycle will stop now. Adobe's acquisition of Figma will probably
| feel anti-competitive in the short-term but I'm skeptical it will
| matter much long term.
| tompic823 wrote:
| When this deal was originally announced, Adobe's stock took a
| ~10% hit. Now that the deal is getting blocked, their stock is
| again taking a hit? I certainly can't claim to understand the
| public markets.
| patrickthebold wrote:
| Maybe it's: "uh-oh Adobe must be in a really bad position if
| they agreed to pay 20b for Figma". Followed by, "Uh-oh, the
| need to buy Figma but can't".
| [deleted]
| Zetobal wrote:
| The first hit was from investors that didn't like the deal...
| the second is from investors that liked it. That the former
| won't come back makes sense and so does the market. Well at
| least in this case.
| xnx wrote:
| Adobe got lucky with this deal in a way that Musk could only wish
| for.
| barelysapient wrote:
| I'm a longtime Figma user and selfishly I hope they don't get
| sold to Adobe.
|
| That said...The sale was rumored to be about $20b. Does anyone
| really think that Figma has any chance of producing a return to
| shareholders even close to that sale price even if they charge
| customers aggressively?
| zamnos wrote:
| The question isn't Adobe will make back their money, though
| they will. The question is how much money they don't get
| because are customers using Figma and no longer have to pay
| Adobe.
| JKCalhoun wrote:
| When Adobe moved to a subscription model (and not a very nice
| one at that) I vindictively hoped that they would spiral down
| the drain to irrelevance.
|
| Kanpai!
| BoiledCabbage wrote:
| The US govts primary concern is not figma shareholders. It's US
| citizens as it should be.
|
| The harm to citizens outweighs the benefit to shareholders by
| too much in this case to allow it.
| curiousllama wrote:
| What's the implied harm to citizens?
| frereubu wrote:
| For all those downvoting this question, I think you should
| take it at face value. It would be nice to think that
| "Genuine question..." is not a prerequisite for that.
| edgyquant wrote:
| Less competition = a worse product. Figma is great and
| that's entirely due to disrupting business from adobe.
| Allowing adobe to buy them means Adobe doesn't have to
| innovate and can remain hyper dominate.
| bradleybuda wrote:
| One harm to citizens is that future entrepreneurs will be
| less motivated to create new products in a regulatory
| environment that makes it difficult or impossible for them
| to profit from selling their businesses. Therefore there
| will be fewer disruptive / innovative products.
|
| If you think this is theoretical, see the startup scene in
| Europe and Canada.
| andrewxdiamond wrote:
| Strangely enough every actor here is doing the right thing.
|
| Adobe is serving their shareholder interests by munching up the
| competition, Figma is selling to Adobe because of the reasons
| you outlined, and the regulators are stepping in to represent
| the interests of the public.
|
| This is very much the system working as-designed
| TedDoesntTalk wrote:
| No, something is off:
|
| > The $20 billion purchase price for Figma equated to 50
| times its forecast $400 million annualized recurring revenues
| in 2022
|
| If you think that serves Adobe shareholder interest, you are
| mistaken.
| DrewADesign wrote:
| Out of context? Sure. But Adobe isn't going to just buy it,
| operate it, and collect its revenue.
|
| Adobe rightfully sees itself standing on the edge of a
| cliff. Adobe XD, despite having some great features, was
| handily clobbered in the market first by Sketch, and then
| by the vastly lighter-weight Figma. Beyond that, Figma has
| a great, intuitive, smooth interface for making vector
| graphics. It's not nearly as powerful as Illustrator, but
| easily does what most interface and web designers need, and
| that's probably a huge chunk of Illustrator's market rather
| than the more intensive digital artist users.
|
| If they lose Illustrator, the ecosystem is a lot less
| valuable. Photoshop has significant competition from
| relative newcomers and print media, etc. made in InDesign
| is has much less gravity than it used to.
|
| So rather than trying to make better and more innovative
| products in earnest, they're going to try to buy and
| suppress their competition just like Autodesk and so many
| other dinosaur graphics companies.
| kitsunesoba wrote:
| I would say that for many users, Photoshop suffers from
| feature bloat even more than Illustrator does.
|
| In my personal usage, nothing that's been added since
| CS1/CS2 has much meaningful impact. Heck rewinding to 7.x
| or even 6.x would pose only minor inconveniences.
| DrewADesign wrote:
| Sure, but in terms of broad software design industrial
| adoption, which is the only relevant metric when looking
| at Figma, that's not relevant. Most companies just pop
| users into their corporate CC site license and give them
| a brand new fast laptop to run it on and be done with it.
| It's basically SAAS at this point. Anyone tinkering with
| old standalone versions of Adobe programs just isn't
| really a factor here. They will likely never be a
| significant part of the paying _Adobe Ecosystem_
| customers, regardless.
| HDThoreaun wrote:
| Creating a monopoly is in every business's interest.
| ideamotor wrote:
| It only serves their interest if it creates a monopoly.
| freeqaz wrote:
| What's growth rate on that revenue though? If it's like
| 20-30% growth per year... you're talking a pretty short
| amount of time (3-5 years) until that revenue multiplier is
| at parity with many publicly traded tech companies.
| oldgradstudent wrote:
| > This is very much the system working as-designed
|
| The system was designed to criminalize any attempt to
| monopolize, not just block the transaction.
|
| The Sherman antitrust act was quite clear about it:
|
| > Sec. 2. Every person who shall monopolize, or attempt to
| monopolize, or combine or conspire with any other person or
| persons, to monopolize any part of the trade or commerce
| among the several States, or with foreign nations, shall be
| deemed guilty of a misdemeanor, and, on conviction thereof;
| shall be punished by fine not exceeding five thousand
| dollars, or by imprisonment not exceeding one year, or by
| both said punishments, in the discretion of the court.
|
| Later it was made a felony.
|
| It is not enforced this way by the courts.
| meany wrote:
| Are you suggesting that Adobe and Figma executives should
| be criminally charged with an attempt to monopolize the
| market?
|
| Edit: I looked up the justice department's stance. From:
| https://www.justice.gov/atr/antitrust-laws-and-you
|
| The Sherman Antitrust Act
|
| This Act outlaws all contracts, combinations, and
| conspiracies that unreasonably restrain interstate and
| foreign trade. This includes agreements among competitors
| to fix prices, rig bids, and allocate customers, which are
| punishable as criminal felonies.
|
| The Sherman Act also makes it a crime to monopolize any
| part of interstate commerce. An unlawful monopoly exists
| when one firm controls the market for a product or service,
| and it has obtained that market power, not because its
| product or service is superior to others, but by
| suppressing competition with anticompetitive conduct.
|
| The Act, however, is not violated simply when one firm's
| vigorous competition and lower prices take sales from its
| less efficient competitors; in that case, competition is
| working properly.
| oldgradstudent wrote:
| Yes. Or at least join the queue.
|
| It it turns out, as almost everyone suspects, that Adobe
| is buying Figma not because Figma will be a source of
| revenue, but mainly to prevent competition, then it's a
| clear violation of the Sherman antitrust act and should
| be punished accordingly.
|
| Before then in the front of the queue should be companies
| like Uber whose entire business plan was dumping to
| destroy the existing taxi industry, and then have the
| monopoly power to raise prices.
|
| That's a pure monopoly play.
| gameman144 wrote:
| Adobe isn't (ostensibly) trying to monopolize though,
| they're trying to buy another company.
|
| Regulators step in and say "That would be a monopoly", to
| which everyone involved says "Darn, well we can't continue
| trying to merge then, since that would be a felony".
|
| This all seems totally fine and legal and working as
| designed.
| oldgradstudent wrote:
| Everyone suspects they're buying Figma for $20B not
| because they think it will bring that amount of money,
| but that it will maintains Adobe's pricing power.
|
| Is that turns out to be true, then it seems a violation
| of the act.
| sleepybrett wrote:
| good, now do google and facebook
| edoggie wrote:
| Yet they couldn't be bothered to stop the merger of every major
| media company down to a total of basically three businesses.
| jeppester wrote:
| Mistakes were made, lessons learned. Hopefully there will be
| fewer of these mergers and acquisitions going forward.
| twoodfin wrote:
| Netflix, Amazon, and Apple?
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(page generated 2023-02-27 23:01 UTC)