The US Department of Justice (DOJ) was expected to follow Europe’s lead to start having a closer look at the deal since it was announced in September 2022.

The issue was that Adobe was effectively eliminating a major rival.

After an investigation, the CMA concluded that adding Figma's interactive design tools would have given Adobe, the creator of Photoshop and Illustrator, a significant hold over the digital design software space. To comply with competition rules, the UK regulator told Adobe that it should sell off Figma's core Design product, which it refused to do.

The EU announced a similar investigation in August, and there are reports that Adobe and Figma had been in discussions with the US Department of Justice (DOJ), which had expressed concerns over the proposal, before announcing the termination of the deal.

Adobe CEO Shantanu Narayen said his company and Figma "strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently."

Figma CEO Dylan Field said in a blog post: "It's not the outcome we had hoped for, but despite thousands of hours spent with regulators around the world detailing differences between our businesses, our products, and the markets we serve, we no longer see a path toward regulatory approval of the deal."

Adobe will pay Figma a $1 billion termination fee as part of the failed merger.

Adobe originally announced plans to purchase its competitor Figma for $20 billion, twice its market valuation, in September 2022. In June, it abandoned its own UI design platform, Adobe XD, which was a direct competitor to Figma.

The collapse of the deal was broadly welcomed by Figma users worried what increased dominance of the design by Adobe might mean, given the market leader's aggressive pricing strategies and what regulators identified as a threat to competition.

For Figma the future is unclear. It could attempt to go public with an IPO or look to be acquired by another large firm like Microsoft.