Your understanding here is fundamentally wrong. Regulators in the US said very early on they were against this merger and were going to fight it. So most of what goes on in the meantime is Adobe and Figma (a) seeing if they can give something up to appease regulators (e.g. it's common for regulators to only sign off on a deal if one of the companies sells off some assets) or (b) decide if they're going to fight the regulators in court.
Your idea of the regulators just "dragging their feet" is incorrect
The idea, proposed by the comment I was responding to, that regulators were just twiddling their thumbs and then only gave a thumbs down to Adobe after 15 months is wrong and completely misunderstands how the regulatory process for merger approval works.
What is also true is that the uk finished its phase 1 review (where they decide to send it for further phase 2 review) in June, so 9 months after the deal was announced. Phase 2 leads to changes in about 50% of deals. The phase 2 deadline was late February 2024, about 18 months later.
I don't think any of this is indicative of anyone sitting on their hands or twiddling their thumbs, but it’s clearly a slow process and that uncertainty clearly isn’t good for the parties involved.
tl;dr: Their was significant action less than a month after the announcement was made.
That's a little over a month after the announcement was made. That is "very early on" in the 15 month "sequence of events."
Keep in mind, this was the announcements. FTA: "The DOJ has been contacting customers and competitors of Adobe and Figma, as well as Figma’s venture capital investors, in recent weeks, the people said. According to one of the people, the DOJ has already issued civil investigative demands — information requests similar to subpoenas — an unusual move at this early juncture in the probe."
So, we are talking about significant action being taken less than a month after the announcement.
I'll grant you "very early on" is subjective, but I feel any reasonable person would say that this constitutes "very early on".
In short, I would urge you to look at the actual timeline of events around the CMA and the DOJ before you keep spreading an inaccurate factual understanding of the sequence of events here.
Also, it’s not as if Figma has been sitting around all this time waiting for their dear Adobe to close. My understanding is that more than 500 new people have been hired since the deal was announced (total is now like 1300+) and growth continues.
I’m just glad Figma can now move on without having to do some “roadmap alignment exercise” or doing the “gradually falling apart” that so many Adobe acquisitions have done.
The real thought should be why Adobe was willing to pay twice the recent valuation to take Figma out as a competitor, and why only European regulators had a problem with it. They have a tendency to kneecap anyone who’s a substantive threat to their market, and we need viable competition in the space.
It may not have been particularly timely in terms of review, but it was never inconsistent. And we have no idea what kinds of delays were put on the deal, including delays from the Figma and Adobe teams.
Which is exactly what they were supposed to do. Adobe and Figma tried to argue with the regulators or find a compromise, but couldn't come up with a solution that satisfied all parties.
If you try to extract subtle implications from the phrasing of a commenter on HN, you're likely to jump to the wrong conclusion.
If companies want a fast answer they can ask for one and it will be no.
All said I do not worry about if billion dollar companies are being fairly treated. They have the capital and expertise to protect their own interests and it’s not worth it to preemptively fight on their behalf.
Perhaps I should introduce you to the legal system? Adobe proposes the merger, DoJ says they will sue to stop it. At that point, if the parties can't come to an agreement, it goes to the courts.
I think it's fine to argue our legal system is too slow, but again, this idea that regulators are just "dragging their feet" to slow things down is fundamentally incorrect. Regulators announced quite quickly they would fight this deal.
Nonetheless, I think my point still stands in that the FTC and DOJ made how they felt about the deal pretty clear.
Adobe (and Figma) knew full well this deal wasn't a slam dunk from the beginning.
Your weasel words are weasley.
I'm not here to fight but it seems you are, especially as you are attempting to make me look the bad guy in a couple comments with innuendo about the spirit of HN and calling commenters 'the peanut gallery'.
I've made my point and you've rebutted there's no further value in arguing.
That's a fine point to make
> hence his ire
Putting your spin on the actions of others is beyond rude
> Your weasel words are weasley.
That's 100% against the HN guidelines and community
I suggest if you wish to disagree then try doing it without being disagreeable
Kinda relevant don’t you think?
I actually haven’t even said whether or not I agree with the decision or whether or not I think the timeline is reasonable (in the sense of whether the benefits and needs of the timeline justify the cost of it), so that doesn’t seem vociferous to me.
If I was being disingenuous I’d post on a throwaway, not an account that you can trivially connect to my identity.
I have a bunch of different feelings about it of course, but I think what I have said here has been factual and verifiable against public information.
One of the things I’ve always enjoyed about hacker news is that it isn’t purely a peanut gallery and people involved in the companies and technologies we talk about do post here. Attributing bad faith to those people when they do participate seems antithetical to the spirit of this place.
You then left seven or eight comments defending that error.
It probably wouldn't have come off as so shady if you had mentioned your employer in the first place.
That said, for mergers like that a ton of countries are involved which makes things even more complicated and makes it harder to point out where we need to make things smoother.
The number of such mergers, globally every year, is countable on two hands. They involve the wealth of nations (this one’s similar to Malta’s GDP [1][2]).
It would be unreasonable to permanently staff the regulatory force that would be required to quickly review such deals in any industry.
[1] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
[2] https://news.adobe.com/news/news-details/2022/Adobe-to-Acqui...
Do they though? People often compare rich people or companies to a country GDP's, but GDP is based on a single year. The size of a company's bank account is not. A year is pretty arbitrary. In some sense it's like saying the distance between New York and Washington is 200 miles which is not that long, because a Ferrari's top speed is 200 mph.
It’s saying the distance is within a class negotiable by a Ferrari.
In the GDP to value case, we’re saying that the consideration at hand is comparable to all of the work of a small country for a year. So the care the latter gets is in the same class as the care the former should receive.
Why would you want to be hiring and firing constantly?
There are permanent staff. There are also legions of industry experts contracted on a case by case basis. Full staff on standby would mean having, on retainer, experts in every industry where a merger might happen.
These are complicated negotiations, in many complicated jurisdictions.
How quick do you think they should be? For everyone to understand the potential ramifications and consult appropriate industry experts? Let competitors et al file briefs?
And I don't see a great reason that negotiations should more than triple that amount of time. If they're not budging, make the "no" final. So two months initial, six months max, would be good numbers.
If the company wants to negotiate with everyone in serial... that's their problem.
> and you don't want some of them knowing that everyone else has already said yes, because then they'll hold out to get some last special thing
Wasn't the thesis of this comment line that government regulators are being slow or being a problem? This supports that idea, I think.
Have you been proximate to a merger?
I didn't truly process the damage that monopolies can do until I heard this podcast with Sean Carroll and Cory Doctorow.
There is a full transcript at this link if you prefer to read the conversation.
https://www.preposterousuniverse.com/podcast/2019/10/21/69-c...
The DOJ and other bodies voiced opposition early on. They signaled quickly that they were not in favor of this. The interim between those actions and today were the regulatory bodies actively making cases against it and/or negotiating with Adobe & Figma how they could proceed in a way that the regulatory bodies would want to approve of the deal.
The whole idea that this was "half-assed" in some way is misguided.
Note that I worked for Red Hat while IBM was acquiring it. It took from (IIRC) October 2018 to July 2019 without strong opposition. When you're talking about companies that have that much impact on a market, it takes a while.
And it should -- the larger market doesn't benefit from waking up to find out that a major software supplier has been gobbled up overnight. You can see the pain that VMware employees + customers are going through right now and they've had a lot of time to process the idea.
For historical references, anti-trust filings began against Standard Oil in 1906, and it was broken up in 1911. [0]
The AT&T breakup took four years, from 1978 to 1982. [1]
There is a difference between enforcing laws and then just trying to burn down everything you touch. Khan is embarking on the latter quest (see the way she tried to handle the Within Unlimited acquisition.)
It would be different if the FTC actually attempted to engage in good faith. As someone that has seen them in action recently, they do not.
Trailing historical average doesn't opine on correctness/utility.
It's irrelevant anyway, Lina Khan's views were well known at the time of her selection, this is the desired outcome by Biden.
Just don't disagree with them and engage lawyers AND then complain about how long "the process" is taking.
I never understand why this is the only other option. If you're in a town and open a coffee shop, and someone else opens a coffee shop, if the town is big enough, you can both thrive. You don't have to try to take out the competition. But every big corporation decides it's the only option.
on the announcement, Sep 15, Adobe stock fell by 17%. the FTC opened some investigation on Nov 2. some EU thing started its process in February (based on filings by refering countries, and of course we have no idea of the details of those country-level processes)
so, all in all, it's likely that relevant authorities quite soon signaled that Adobe-Figma is facing an uphill battle, and now, as they announced, they backed down.
we have no idea of the negotiations, who was fast or not, who recommended what, asked for what guarantees, and so on.
detailed timeline, explanations, submissions etc here from UK’s CMA:
https://www.gov.uk/cma-cases/adobe-slash-figma-merger-inquir...
And with market conditions having changed so much in 15 months, this could just as easily be buyer/sellers remorse before the deal actually closes. For a 15+ month closing, it wouldn’t be the first time!
Actually completing mergers/buyouts takes years anyway.
Promise?
It makes zero sense to discourage a non-monopolistic M&A.
The negotiations took that long, to come to nothing. Clearly Adobe couldn't come up with a solution to the problem of a potential monopoly.
Most M&As happen quite quick, mostly dealing with acquiring companies that are outside of the purview of regulators.
Presumably regulators in a few countries were interested, each with their own processes, and presumably there's some fairly significant back and forth between the regulators and adobe/figma as adobe/figma tried to convince the regulators that the deal should go ahead.
15 months seems very believable for a deal of this size.
I really doubt regulators are dragging their feet. They are most likely understaffed and overworked. Things this big should take time for all sides.
> you can expect a serious chilling effect on M&A
Oh no, less corporate consolidation. The horror. Won't someone think of the capital class for once?
They didn't. They started seriously investigating it less than a month after the announcement and publicly shared this information just over a month later.
> but regulators need to make up their minds quicker
They did. Adobe and Figma were trying to appease regulators by figuring out if there was a way to handle their concerns. They aren't willing to divest themselves enough from their existing portfolio or offer concessions.
If you want them to make up their minds quicker, then the default answer should be No. With weeks not even being an acceptable time frame for action, anything other than No is harmful.
https://www.politico.com/news/2022/11/02/doj-review-adobe-20...
The DOJ already signaled it wanted to block this on antitrust grounds almost a year ago. If "regulators" had immediately rejected the deal, there'd be a similar "oh, this will have a chilling effect" complaint because they slapped it down without adequate due diligence.
This is one M&A deal out of many. The vast majority -- even some that shouldn't be approved IMO -- sail through or squeak through due to persistence. I just can't find it within myself to feel bad for Adobe in this, since the most likely outcome was to just solidify Adobe's grip on the market and reduce competition. I know quite a few people who use Figma who were absolutely dreading this merger.
I agree with your overall point that the current regulatory process related to anti-trust M&A very much needs to be improved. While the delay may be the proximate cause, focusing on that risks failing to address the fundamental root cause of the problem, which is A) lack of clarity in regulatory policies and the underlying laws authorizing them, and B) their inconsistent application across different industry contexts and between different international jurisdictions.
The lack of clarity can be improved by regulators adopting clearer public guidelines about how they will interpret and apply the rules (and then establish credibility by actually sticking with those guidelines over time). Improving consistency across jurisdictions is more challenging but still possible if regulators in the largest domains (US and EU) collaborate to harmonize their policies (as is done in many other regulatory contexts).
Recently, Lina Khan in the US has made this problem far worse by aggressively pursuing quite extreme interpretations of anti-trust law, and worse, doing so without establishing any corresponding framework or justification. As a result, this bungling has caused her agency to lose several high-profile cases. So far, much of this bungling seems to be "just for show" (ie political posturing) since it's not working.
Unfortunately, it also has the effect of nerfing the market for entrepreneurial exits via acquisition. While it's true that acquisitions large enough to attract anti-trust scrutiny are outliers, much of the money invested in earlier stage startups (which drives most new job creation in the US), is justified by average returns substantially propped up by a few such >100x acquisitions. Half the extreme high-end outliers being lopped off by regulatory uncertainty around large acquisitions is one reason capital for new business creation and growth is getting scarcer and more expensive. The point being, this matters to our industry and jobs.
This is absolutely not true.
> "Despite the jobs lost during the recession, large businesses generated 6.7 million net new jobs over the past 25 years. During the same period, small businesses generated 12.9 million net new jobs, meaning small businesses have accounted for 66 percent of employment growth over the last 25 years."
https://advocacy.sba.gov/wp-content/uploads/2022/04/Small-Bu...
https://www.chamberofcommerce.org/small-business-statistics/
Combined with the long-term (25-year) data I cited further above, this indicates the majority of small businesses are started up recently. The pool of small companies is constantly turning over and refilling with new startups - of which the vast majority die in less than ten years and a very few grow to be large companies (thus no longer counted in the pool). By definition, the shape of the small business pool must be a very slender, very long curve when graphed by employee count.
I think the tech community has perhaps a different set of connotations associated with the term "startup" than the non-tech, non-valley populace. The vast majority of startups (ie small companies started in the past five years) aren't technology companies and aren't fast growth. Yet there are so many of them, they comprise two-thirds of new job creation. Even better, many of these newly created jobs are entry-level, don't require advanced degrees or rare skills and don't require relocation to costly and crowded urban centers.
I think this misconception of small businesses is pretty common in the high tech community. Before I was a tech entrepreneur in the valley, I started out as a non-tech entrepreneur far from the valley. Then I was a tech entrepreneur far from the valley, in a mid-western U.S. state. Despite being in the fairly large state capital, the largest regional newspaper wrote a story about "Tech Companies Here in the Capitol", citing my software startup and the local Radio Shack store as the only two :-). Yet the local Chamber of Commerce, Small Business Administration and entrepreneurship clubs were overflowing with pre-launch and just launched new startups ranging from a new kind of farm animal feed distributor to sandwich shops to (non-franchise) local restaurants to karate studios. Together these small businesses employed thousands of people in a city whose population could probably all fit within a few square blocks of NYC.
I also want to point out, the organic, diverse, self-renewing nature of small business reality outside the tech, valley, urban bubbles is incredibly encouraging. As much as I love tech (and how rewarding it's been for me personally), I'm thankful the fickle, boom/bust, incestuous nature of high-tech startups is statistically the rare exception of new companies being started which drive new job creation.
How in the world did it take fifteen months for regulators to reject this? That’s an absurdly long time to be operating a business in limbo, and I have to assume it’s the regulators dragging their feet since the companies have every incentive to move quickly.
I don’t have an opinion on whether or not the merger should be approved, but regulators need to make up their minds quicker or else you can expect a serious chilling effect on M&A. Can you imagine agreeing to get acquired knowing that it can take up to 2 years to close? Anyone operating a real business would be crazy to sign on for the distraction.