Adobe's buy of Figma is 'likely' bad for developers, rules UK regulator
theregister.com
theregister.com
How could a merger like this possibly be good for consumers? You take two companies actively competing against each other and ...stop one of them.
With two or three companies - yeah, not so much.
Antitrust law should really get amended with that framework in mind.
The problem with monopolies -- and monarchies for that matter -- isn't that they're inefficient. They're incredibly efficient. It's merely that the gains are almost universally used to enrich the owners of the means at everyone else's expense.
Standardization ≠ centralization, btw.
When everyone else is locked out of competing, the market owners lose incentive to do anything but maintain status quo.
There’s an interesting psychology here. We think of business leaders as hyper competitive, but they often seem to try to get to a place where they not only beat their competitors, but try to lock them out of the playing field.
Once there’s little or no threat from competition, doesn’t that get boring?
Athletes are competitive, but I think in a different way. I don’t think an athlete would find much enjoyment if they figured out a way to always be the only ones on the track, slowly meandering around by themselves.
A really good, palpable example of monopolies having a stifling effect is internet access, especially in non-urban US areas.
There's a graph on this page title "Perfect Competition, Monopoly, and Efficiency" [1] that shows how since the monopoly can price set they choose a higher price than where demand meets supply since it results in higher profits. This isn't achievable in a competitive marketplace as then somebody else would just undercut them.
Interestingly you can correct this inefficiency by subsidizing a monopoly so that it offers the correct amount of supply.
[1]: https://saylordotorg.github.io/text_principles-of-microecono...
Also economies of scale do work in software/creative ventures. However these tend to be cancelled out by other diseconomies of scale that are caused primarily by ineffective communication, aversion to change, and people (and government's) changing attitudes to larger companies [2].
What you referred to about creative teams being more cost-effective the smaller the company follows logically from most diseconomies of scale. For example in large companies the biggest decision makers tend to be isolated from the results of their decisions. This is in part because decisions take many weeks/months to be properly evaluated by a team of analysts (who may suffer from their own economies of scale if the business is large enough) and partly (I don't think this is written about but just my own opinion) because the biggest decision-makers will have the most authority and hence their subordinates will not be eager to tell them that their decisions had a negative response.
If anybody finds any fault in this comment please reply to it. Please be polite.
[1]: when a large company borrows from a bank they usually obtain lower interest rates as large companies usually tend to borrow large sums of money on which even a low interest is still very high.
[2]: if a company like Google makes decisions that could, from 1 particular angle, be considered as anti-competitive the government is more likely to consider the situation from that 1 particular angle rather than if a smaller company takes the same decision. However, this assumes a perfectly functional government in a MEDC (as LEDCs won't usually go after monopolies since they want foreign investment from large companies) that also happens to be non-corrupt
There's obvious cases where there's small teams that make outsized impacts and teams that grow too unwieldy to manage.
But there's a reason why we don't have 300 Linux Kernel projects: there would be a whole lot of duplication of effort and it would cost 300x as much.
Indeed, software has massive economies of scale because duplication is basically free. It has a bit more of a tendency to fall into monopoly or oligopoly as a result: there's barriers to entry but no production costs.
the European Commission reached the preliminary conclusion on Friday that if the deal goes ahead, it may “significantly reduce competition in the global markets” for the supply of interactive product design tools, vector editing tools, and raster editing tools.
This article lists a large amount of pitfalls when trying to do just that: https://fasterthanli.me/articles/just-paying-figma-15-dollar...
And this isn't some esoteric use case used as an excuse. The core need the author has is "export my diagram to SVG and have it render the same in all browsers".
I've used several tools over the years and am not afraid to jump into a new UI or workflow, but have come to believe that's an exception and probably driven by the dev part of my brain.
It could be that much of design tool "output" is source-of-falsity, i.e. experiments, drafts, non-production work that is left in an ideation stage. For stuff like that, there's more breathing room for less-sophisticated products to shine.
What they don’t have is the inertia of Figma and being as-good-as or maybe a little better isn’t enough to get the traction they need.
Based on the linked article's description it's much worse.
In browsers that’s not a big problem generally.
For other platforms, what would happen if OP printed to PDF from the browser instead of exporting the SVG to PDF with a separate program?
> No you don't.
> Cool, back to Figma.
Adoption drives improvements.
If we want a good open source replacement for Figma, we need more people to use the software daily. That’s the point.
I feel like Penpot could become the dev favourite over figma for the API alone
Much like Microsoft's acquisition of Activision Blizzard, Oktas acquiring Auth0, it is just market consolidation.
If we got rid of M&A in tech there would significantly less investment and much less innovation, which I think you could argue is bad for the ecosystem as a whole and the end consumer of these products – even if individual acquisitions are often not great when viewed independently.
Or to look at it another way, big tech basically outsources their R&D to startups and the successful projects (companies) are then acquired. And this goes both ways given the goal of a lot startups is to be acquired.
I assume by "realistic" you mean companies that prioritise profitably?
I don't hold a strong opinion on this, but the way I see this is that, yes, investors could invest in companies and demand those companies maximise profits so they can see a return on their investment as soon as possible without the need for accusation, but I genuinely don't know if most users would agree this is better for them.
To appeal to an acquirer or other investors companies most first appeal to their users and show strong user growth. So I don't buy your second point that companies prioritising profitably are somehow more focused on building a good products for their users – and if anything I'd probably argue the inverse is generally true.
I suppose if you were to push me for an opinion on this I think it's fine to let the market decide what's best. Companies can already focus on profits if they wish. And if you're right that companies that do this will have better products and keep their users happy then companies that choose to do this should take market share from big tech over time.
But to be so certain of this that you'd use regulation to enforce it thereby destroying a significant source of funding from early stage companies and the innovation those companies provide the tech sector would be a risk. Especially when I'm not even sure you're right that consumers prefer companies that focus on profitability.
It’s hard to compete with free. You can’t burn millions you don’t have to present a sweet deal to users or releasing features in month. And now people have become accustomed to receive everything on the internet for free (bundled with ads).
How many competitors died on the vine because Figma was able to offer a free tier subsidised with low interest rate VC money?
Is it any different from wealthy established multinationals offering a free tier subsidized by steady profits from established (sometimes even monopolistic) product lines killing all startup offerings?
This right here. What happened to IPOs being the endgame?
These two are negatively correlated. Google and reddit and other companies were awesome and very user friendly when they had investors pouring in money and they could afford loss.
All the VC hate in HN is weird given we are in a platform owned by VC.
If Figma was being acquired by literally any other company the regulators wouldn't have any problems with it.
> If we got rid of M&A in tech there would significantly less investment and much less innovation
It appears this way because of the path we took with our economy, but that doesn’t mean that an alternate path isn’t viable. The giants didn’t get big through innovation. They all created some initial innovation that allowed them to print money, which then allowed them to gobble up any other company that could either be of use or compete against them. If they weren’t able to acquire, that money wouldn’t disappear from the economy. It could be sent back to shareholders in the form of dividends, who would find other investments for it. Perhaps the market would find the best use for that money instead of having it controlled by a few giant entities. I tend to think that’s how the stock market was supposed to work.
Would the founders work as hard as they did, if instead of making $5bn, they made $2bn? Probably just as hard.
Yes, price signals work, but not linearly at these scales.
With many games taking over 3 years now to make and about 10 of those Activision studios working on just Call of Duty, they have several more studios to go.
Sony’s acquisitions are less “egregious” as the companies they acquire usually generated few to no (valuable) IPs for their competitors - there are exceptions of course. That’s why most all of their acquisitions fly under the radar.
But otherwise yes, Okats & Auth0, Figma + Adobe 100% travesty. As would have been nvdia + arm.
Do we really want governments implicitly part-owning companies that aren’t related to violence? At least a monopoly can be out innovated.
Designers believing themselves to be forever locked into the Adobe clown cloud are literally turkeys paying for Christmas.
I really don't know why every business transaction has to be some kind of mission that will take us to Nirvana.
What is wrong with people taking money?
If Figma is bad for Developers let them build an alternative since they are developers or they can just use several of the many Figma alternatives.
Is the wrong question to ask.
Money is a means to facilitate self-organisation in the economy — it's not a good in itself, only as a means to an end.
For the most part, people are happy to not look too closely and just assume it's all good, but the entire point of regulators such as the Competition Markets Authority is to find the cases where a trade isn't good for the wider economy.
It baffles me that Europe programmers has similar or better education and skills than US, but they get paid 1/3rd of US's salary for the same cost of living for senior positions.
Sure, let's just throw something together and it will work as good as something worth 20$ billion dollars..
Value is not the same as cost. The cost of acquiring something is not the same as the cost of building something.
That value estimate is what the built thing plus company staff plus brand recognition plus timing is worth. Hardly the same thing as what it would cost to build again. Especially now knowing an effective UI/UX for the task.
How does this "hinder the growth of human development"
Figma had chance to grow later to level where it could become Adobe competitor, now it's no hope that would be any competition any time soon.
Just to illustrate why I think that. Usually Adobe software used for everything so is no escape in most cases, but Figma became so widespread in popular specific case so it could really transform situation in way: use Adobe for everything but for UI/Web use only Figma. In that way everybody become committed enough to Figma ecosystem and they as company can start offering new tools which will able to capture Adobe businesses bit by bit.
Note the regulator phrases the concern, not as "monopoly", but as "substantial lessening of competition (SLC)".
In particular, page 6, item 25:
> We consider that Adobe’s and Figma’s platforms are characterised by network effects. These network effects cause the value of the respective platforms to increase with the number of users. These strengthen Adobe’s position in vector and raster editing software. They also strengthen Figma’s position in product design software. Network effects operate across markets. For example, the value of using Figma’s vector and raster editing offerings is greater the more Figma is used for product design, and vice-versa. Therefore the strength of the Parties’ positions in each of these markets is influenced by their strengths in the others, implying that the Parties exert multi-market competitive pressure on each other across vector editing, raster editing, and product design.
Page 9, item 41:
> The Parties identified more than 45 competitors in vector editing and more than 65 in raster editing. We undertook an assessment to identify the most relevant competitors in each of vector and raster editing software. We considered the extent to which these competitors are referred to in the Parties’ internal documents and in third-party evidence. We consider that very few competitors in vector editing software (Affinity and Corel Draw) and raster editing software (Affinity) provide any meaningful competitive constraint on Adobe’s product development for professional users, and that constraint is weak to moderate at most. This is particularly true for product design and related digital use cases
Even in sports there are winners & losers.
One of the economic rules in certain countries is "we like competition, don't thwart it".
There's a huge problem in most sports precisely because of money. Those that have the money have the best players, the best equipment, the best facilities etc. And yes, they spend money on exclusive contracts and deals so that others don't get the same.
Some sports even go as far as try and implement certain restrictions and limits so that money don't play such an outsized role
Easy. The larger any company gets, the more difficult it becomes to compete with them as customers of a potential competitor expect a certain set of features to be available to even consider migration, and thus the large company gets ever more and more market share over time. On top of that the large company may simply outspend a competitor in advertising or sue competitors for barely-legal patents.
Capitalism at its core is the ruthless elimination of inefficiencies, and competition is inefficiency (just look how many dozens of billions of VC were burned in the "gig economy" sector to get rid of competitors).
The problem for the development of humanity is that an entrenched, dominant/monopolist company has zero reasons to innovate and progress.
Also, VCs do fund competitors so it's not as black & white as you think.
For that, there needs to be an alternative option. Just look at Walmart and how they destroy small food stores in a massive radius around them as no small retailer can compete with their scale.
No, they don't always have a choice
The public wil simply shift to an alternative.
"simply"
Figma does have features specifically made for developers rather than designers, but my guess is that's not what they're talking about, they just mean "software people".
Lina Khan is really struggling on anti-trust. The lawyers aint buyin it.
I do think our current big tech is a toooo big. The big 5 (AAPL, MSFT, GOOG, AMZN, NVDA) with > 1$ trillion market cap need to be broken.
I presume the CMA doesn't have worldwide jurisdiction (I mean, even hypothetically, under UK law). However, if a merger went ahead against its wishes, I presume it could easily block the Figma portion of Adobe operating in the UK.
I think the only way to do it would be to entirely pull Adobe out of the UK market. This would be extremely difficult for many reasons, not only that Adobe has many multi year enterprise license agreements with many UK companies which would incur enormous penalties for severing them, plus the UK is probably still a quite large market for Adobe.
I'm not even sure if that's possible though, as they could still get a judgement in the UK and then take that to other jurisdictions to get payment for fines and other breaches.
Actually it's so good it makes Adobe software look embarrassing how poorly it performs.
I'll bite, what do you despise about it?
As in, the fact that it's not built using native Mac OS elements unlike Sketch? If so, is this because it's slow even when opening one file, or just because it's not native code?
>I hate that copying from Figma creates something in the pasteboard that most apps won't allow to paste
That's probably because it's a vector and ensuring cross-app compatibility frankly isn't something that Figma (or any other program like Sketch) will place high on their todo list because designers generally stay in 1 tool.
For your last point, the only time I've had Figma open in the browser and then not open the tab in the desktop app was when I got a new work computer and I hadn't set the auto open in the app functionality yet.
Also, I'm really, really curious as to why people on your dev team go Figma --> Affinity Designer --> Sketch just to get assets. Are you looking for elements like spacing and color hex codes, or are you looking to export those assets into something like Jira so you have screenshots? Figma should be able to do all of those things in app, however I will say that if you only have view access and want to export something, someone with edit access will have to set something to be exported.
> That's probably because it's a vector and ensuring cross-app compatibility frankly isn't something that Figma (or any other program like Sketch) will place high on their todo list because designers generally stay in 1 tool.
This is just wrong. As I mentioned further down, a complex UI element with vector shapes and text on it can be perfectly copied and pasted between Sketch, Affinity Designer / Publisher / Photo, or even Pixelmator - I'm fairly sure it's just postscript in the paste buffer. Lord knows what is actually getting stored in the pasteboard when you copy from Figma, but whatever it is there's a 1/100 chance of you being able to paste it anywhere. If you copy as SVG it produces an abomination with all the text as paths.
The Figma -> Affinity Designer -> Sketch flow is just to get stuff into an app that doesn't behave in a completely alien way to every other app.
Copying and pasting a complex UI element between Sketch, Affinity Designer / Publisher / Photo, or even Pixelmator works perfectly. Every other app I have has a functioning pasteboard.
Lacking as in completely non-existent. I used to love Sketch for being a very nice native feeling Mac app but Figma proved that doesn't really matter and I also love the fact it works on PC now PCs are the workhorses for creative AI workflows.