Competition and Markets Authority

Overview

The Competition and Markets Authority (CMA) is the United Kingdom’s primary competition and consumer authority: an independent non-ministerial government department that investigates mergers, acts against cartels and anti-competitive behaviour, investigates whole markets, and protects consumers from unfair trading practices (GOV.UK). It was created by merging the Office of Fair Trading (OFT) and the Competition Commission into a single authority, acquiring its full powers on 1 April 2014 under the Enterprise and Regulatory Reform Act 2013 (CMS LawNow). Its best-known recent test was Adobe’s proposed $20 billion acquisition of Figma — a case in which the CMA’s provisional findings, and the remedies fight that followed, helped end a merger without the regulator ever having to issue a final ban.

The CMA’s own account of its job is deliberately broad. It says it promotes competition and protects consumers “with a clear end goal – economic growth and household prosperity,” including by investigating mergers that could substantially lessen competition — where it “can block it or impose remedies” — and by promoting effective competition in digital markets (GOV.UK). Decisions in some investigations are made not by its executive but by independent members of a CMA panel, a safeguard carried over from the old two-body system in which the OFT ran phase one and the Competition Commission ran the longer, deeper phase two (GOV.UK; CMS LawNow).

One authority from two

The 2013 Act’s central reform was consolidation: bringing the OFT’s consumer and competition work together with the Competition Commission’s inquiries under one roof, to remove duplication in the two-stage merger and market-investigation procedures and to let the new body plan and prioritise coherently (CMS LawNow). The Act received Royal Assent on 25 April 2013, and the CMA took on both stages of merger control, all market studies and investigations, enforcement of the Competition Act 1998, criminal cartel proceedings, and part of the OFT’s consumer protection work (CMS LawNow). The merger of the regulators was itself presented as more than administrative tidying: the government argued a single authority would be a more powerful advocate for competition and consumer protection in the UK and abroad (CMS LawNow).

The Adobe–Figma case: provisional findings that ended a merger

On 13 July 2023, the CMA referred the deal to an in-depth Phase 2 investigation under the Enterprise Act 2002 (Gibson Dunn). Its phase-one work had already found the parties competing in screen design software — where Figma held a substantial market share and Adobe kept investing — and in creative design software, where Adobe was the industry standard and Figma an emerging threat (Gibson Dunn).

On 28 November 2023 the CMA’s independent inquiry group published provisional findings that the deal would eliminate competition between two main competitors in product design software, reduce innovation and the development of new competitive products, and remove Figma as a threat to Adobe’s flagship Photoshop and Illustrator products (GOV.UK). The numbers behind that judgment were stark: around 80% of the professional product design market used Figma’s software, in a UK digital design sector worth nearly £60 billion — 2.7% of the national economy — employing over 850,000 people in highly skilled work (GOV.UK). The inquiry group also provisionally concluded that Adobe had abandoned development of new product design software that could have competed more closely with Figma, and had done so as a consequence of the merger (GOV.UK).

The findings were provisional, and the CMA opened a consultation on findings and remedies running to 19 December 2023, ahead of a final decision due by 25 February 2024 — with remedies that “could include blocking the deal outright” (GOV.UK). But the remedies notice itself narrowed the escape routes drastically. As Gibson Dunn summarised, the CMA offered only two structural remedies: prohibition, which it called a “feasible remedy” providing a “comprehensive solution,” or divestiture of overlapping operations — while acknowledging that, since substantially all of Figma’s business sits in the all-in-one product design market, any partial Figma divestiture would in reality resemble prohibition (Gibson Dunn).

Adobe refused. In a letter dated 14 December 2023 the company rejected the proposed remedies, calling them “disproportionate”; its spokesperson said, “It is clear that no realistic remedy would satisfy the concerns the CMA is maintaining” (PYMNTS). Hours before the termination announcement, the CMA published a document noting that Adobe had refused to offer remedies to satisfy its concerns (Mondaq). On 18 December 2023 Adobe and Figma mutually terminated the merger, concluding there was “no clear path” to clearance from EU and UK regulators, with Adobe to pay Figma a $1 billion reverse termination fee (Gibson Dunn; Mondaq). The European Union’s parallel investigation had reached a similar preliminary view, but the CMA’s sequence — provisional finding, prohibition-or-nothing remedies, refusal, termination — is what made this case a landmark in UK merger control: an innovation-based theory of harm, pursued to the point where the deal collapsed before any final verdict was needed.

What this profile does not claim

This profile does not claim the CMA blocked the Adobe/Figma merger: no final decision was ever issued, and the deal was mutually terminated during consultation on provisional findings. It does not reproduce the 14 December 2023 remedies response letter itself, which was not read in full; Adobe’s rejection is attributed to the PYMNTS/Bloomberg and Goodmans/Mondaq reporting cited. It does not cover the CMA’s wider caseload or its post-2024 digital-markets regime in any detail — the remit summary rests on the CMA’s own about page, and the case study is deliberately confined to Adobe/Figma.