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According to the FTC the law states that mergers are illegal when the effect "may be substantially to lessen competition or to tend to create a monopoly." Pret

According to the FTC the law states that mergers are illegal when the effect "may be substantially to lessen competition or to tend to create a monopoly." Pretty positive this would lessen competition in design software and restablish Adobe as a monopoly. This merger should be blocked. https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/mergers/competitive-effects https://www.ftc.gov/advice-guidance/competition-guidance/gui...

that_guy_iain 4y ago
Considering the instant response on HN was to upvote the open source competition and the fact many people are probably going to leave to go to a competitor because they hate Adobe. It probably doesn't lessen competition but increases it since a lot of competitors are getting sign ups right now.
- arthurofbabylon 4y ago
  The argument "but there are competitors" – that the very existence of other players in a market should preclude the blocking of acquisitions – is flawed and misleading. For competition to strengthen a space, it needs to be meaningful competition. The goal for regulators should not be "more than one player in every category." It should be diverse product expression, improved customer utility, and most of all ZERO winner-take-all effects. That last item (winner-take-all) is crucial to understand, and I'm sad that it is no longer a major part of economic discourse (as it once was when systems-thinking was more common). Winner-take-all effects often occur without an explicit monopoly, yet devastate the category and its adjacent categories.
  - that_guy_iain 4y ago
    > For competition to strengthen a space, it needs to be meaningful competition. There are meaningful competitors to Adobe's design tools. There are quite a few applications like Figma with a decent amount of traction. The fact they will be receiving an uptick in users will increase their meaningfulness which means Adobe acquiring Figma is not lessening the competition.
    - MajimasEyepatch 4y ago
      Why do you think that other companies will see an uptick in users from this? Most companies are not going to renegotiate contracts, update all their processes and tools, and retrain all their users just because this got bought by Adobe (which they are probably already paying for other tools). This absolutely reduces competition.
      - that_guy_iain 4y ago
        > Why do you think that other companies will see an uptick in users from this? Because the number of people who are saying "Adobe is going to ruin Figma". While companies aren't going to renegotitate, freelancers and designers doing personal work will just switch to another freemium tool. And tools end up in the work toolchain by the employees using them and suggesting.
ChildOfChaos 4y ago
How much is this enforced though? Wouldn’t this make most mergers illegal? I guess it all comes down to who defines what ‘substantially lessen competition” means
- mtgx 4y ago
- airstrike 4y ago
  The rule of thumb is if there are still at least 3 competitors left in a market, it is not "substantially" lessening competition
noelsusman 4y ago
The FTC uses the Consumer Welfare Standard to decide antitrust cases, which means they have to show that a proposed merger would cause tangible harm to consumers. If "reducing competition" was the standard then all buyouts/mergers would be illegal since they all necessarily reduce competition.
- pastor_bob 4y ago
  Did they use the Consumer Welfare Standard to block Visa's acquisition of Plaid? Seems like the main reasoning they used was because it was a strategic buy rather than a financially sound one. (and the finances of this deal pretty much mirror Plaids)
  - MajimasEyepatch 4y ago
    With Lina Khan running the FTC, I definitely expect more scrutiny of this proposal than it would likely have received in the past.
- DoneWithAllThat 4y ago
  Why did you elide the “substantially” clause?
- oyeanuj 4y ago
  That's what they have used in the past, and are not bound to it. If you read any of Lina Khan's work, it's clear that they'll take a more holistic view of the impact of lack of competition.
  - noelsusman 4y ago
    That's a good point, it's important to note the current FTC chair is working to change the standards that are used. I'm excited to see how that pans out. I think the lack of antitrust enforcement in recent decades is a really underrated problem in American governance.
- Ericson2314 4y ago
thehappypm 4y ago
Miro and Canva are really similar to Figma, no ?
- killerdhmo 4y ago
  Not... really. Sketch is what is most analogous.
  - orangepurple 4y ago
    Sketch is locked to MacOS which limits its applicability
    - azinman2 4y ago
      They have a pure web version.
      - deleted 4y ago
        [deleted]
      - skilled 4y ago
        They don't. The web version is a viewer not an editor.
        azinman2 4y ago
        Interesting. I always thought it was an editor. Given it can preview I’m guessing they’re working towards a web editor too.
  - hn_throwaway_99 4y ago
    Sketch is perhaps most analogous, but I remember a couple years ago where designers left Sketch in droves to move to the better features of Figma. If Adobe thought Sketch was a competitive risk, they'd be buying them instead.
- samsolomon 4y ago
kriops 4y ago
There is probably a triple-digit number of legitimate competitors out there.
- azinman2 4y ago
  For sure not triple digit legitimate competitors. To be legitimate competitor means some very mature software / service. I can think of Sketch and Adobe XD, maybe Balsamiq but not quite the same. What are these 100 extra well formed alternatives?
yummybear 4y ago
The key word is "substantially" - there are plenty other competitors.
- hn_throwaway_99 4y ago
  There may be "plenty" of other competitors, but I think it's pretty undeniable that Figma is the "up-and-coming" (or maybe it already got there) market leader among "design tools for web design". I also think it's pretty apparent that Adobe knows this and that's why they want to buy them. This is the exact same pattern as Facebook buying Instagram, and heck the same as some of Adobe's previous acquisitions, where large corporations buy out competitors that could potentially overtake them. If antitrust means anything it should block these types of acquisitions.
solardev 4y ago
Does the FTC even do anything anymore...? I can't remember a single significant enforcement action in my lifetime.
- js2 4y ago
  The FTC blocks mergers all the time. Here’s some in the news: https://khn.org/news/article/biden-ftc-block-hospital-mergers-antitrust/ https://khn.org/news/article/biden-ftc-block-hospital-merger... https://www.airandspaceforces.com/ftc-blocks-merger-of-lockheed-and-aerojet-rocketdyne/ https://www.airandspaceforces.com/ftc-blocks-merger-of-lockh... https://www.nasdaq.com/articles/nvidia-and-arm-merger-deal-blocked-by-ftc-on-competition-grounds https://www.nasdaq.com/articles/nvidia-and-arm-merger-deal-b... https://www.housingwire.com/articles/50114-ftc-moves-to-block-12-billion-merger-of-fidelity-national-and-stewart/ https://www.housingwire.com/articles/50114-ftc-moves-to-bloc... https://www.legalbettingonline.com/news/daily-fantasy-sports-merger-blocked-by-ftc/ https://www.legalbettingonline.com/news/daily-fantasy-sports... Mostly the FTC’s work happens quietly and unnoticed, but there are annual reports here: https://www.ftc.gov/policy/reports/annual-competition-reports https://www.ftc.gov/policy/reports/annual-competition-report... And you can search merger actions here: https://www.ftc.gov/enforcement/merger-review https://www.ftc.gov/enforcement/merger-review
  - solardev 4y ago
    Are there any significant historical cases? The Nvidia and Arm one seems like a big deal (if it succeeds), but the others just seem like random low-hanging fruit. I feel like the ones that matter (ISPs, cell phone carriers gobbling each other up, the Microsoft/Facebook/Adobes of the world, AMD buying ATI...) never really get stopped.
    - deleted 4y ago
      [deleted]
    - js2 4y ago
      AT&T/T-Mo blocked: https://www.justice.gov/opa/pr/justice-department-files-antitrust-lawsuit-block-att-s-acquisition-t-mobile https://www.justice.gov/opa/pr/justice-department-files-anti... https://en.wikipedia.org/wiki/Attempted_purchase_of_T-Mobile_USA_by_AT%26T https://en.wikipedia.org/wiki/Attempted_purchase_of_T-Mobile... T-Mo/Sprint would have been blocked (and fell apart multiple times) if not for the Trump administration: https://en.wikipedia.org/wiki/Merger_of_Sprint_Corporation_and_T-Mobile_US https://en.wikipedia.org/wiki/Merger_of_Sprint_Corporation_a... I think you’re undervaluing the significance of the FTC’s everyday work, but I’ll agree with your the Federal government has not been aggressive enough in exercising its anti-trust authority.

that_guy_iain 4y ago

Considering the instant response on HN was to upvote the open source competition and the fact many people are probably going to leave to go to a competitor because they hate Adobe. It probably doesn't lessen competition but increases it since a lot of competitors are getting sign ups right now.

arthurofbabylon 4y ago
The argument "but there are competitors" – that the very existence of other players in a market should preclude the blocking of acquisitions – is flawed and misleading. For competition to strengthen a space, it needs to be meaningful competition. The goal for regulators should not be "more than one player in every category." It should be diverse product expression, improved customer utility, and most of all ZERO winner-take-all effects. That last item (winner-take-all) is crucial to understand, and I'm sad that it is no longer a major part of economic discourse (as it once was when systems-thinking was more common). Winner-take-all effects often occur without an explicit monopoly, yet devastate the category and its adjacent categories.
- that_guy_iain 4y ago
  > For competition to strengthen a space, it needs to be meaningful competition. There are meaningful competitors to Adobe's design tools. There are quite a few applications like Figma with a decent amount of traction. The fact they will be receiving an uptick in users will increase their meaningfulness which means Adobe acquiring Figma is not lessening the competition.
  - MajimasEyepatch 4y ago
    Why do you think that other companies will see an uptick in users from this? Most companies are not going to renegotiate contracts, update all their processes and tools, and retrain all their users just because this got bought by Adobe (which they are probably already paying for other tools). This absolutely reduces competition.
    - that_guy_iain 4y ago
      > Why do you think that other companies will see an uptick in users from this? Because the number of people who are saying "Adobe is going to ruin Figma". While companies aren't going to renegotitate, freelancers and designers doing personal work will just switch to another freemium tool. And tools end up in the work toolchain by the employees using them and suggesting.

ChildOfChaos 4y ago

How much is this enforced though? Wouldn’t this make most mergers illegal? I guess it all comes down to who defines what ‘substantially lessen competition” means

mtgx 4y ago
airstrike 4y ago
The rule of thumb is if there are still at least 3 competitors left in a market, it is not "substantially" lessening competition

noelsusman 4y ago

The FTC uses the Consumer Welfare Standard to decide antitrust cases, which means they have to show that a proposed merger would cause tangible harm to consumers. If "reducing competition" was the standard then all buyouts/mergers would be illegal since they all necessarily reduce competition.

pastor_bob 4y ago
Did they use the Consumer Welfare Standard to block Visa's acquisition of Plaid? Seems like the main reasoning they used was because it was a strategic buy rather than a financially sound one. (and the finances of this deal pretty much mirror Plaids)
- MajimasEyepatch 4y ago
  With Lina Khan running the FTC, I definitely expect more scrutiny of this proposal than it would likely have received in the past.
DoneWithAllThat 4y ago
Why did you elide the “substantially” clause?
oyeanuj 4y ago
That's what they have used in the past, and are not bound to it. If you read any of Lina Khan's work, it's clear that they'll take a more holistic view of the impact of lack of competition.
- noelsusman 4y ago
  That's a good point, it's important to note the current FTC chair is working to change the standards that are used. I'm excited to see how that pans out. I think the lack of antitrust enforcement in recent decades is a really underrated problem in American governance.
Ericson2314 4y ago

thehappypm 4y ago

Miro and Canva are really similar to Figma, no ?

killerdhmo 4y ago
Not... really. Sketch is what is most analogous.
- orangepurple 4y ago
  Sketch is locked to MacOS which limits its applicability
  - azinman2 4y ago
    They have a pure web version.
    - deleted 4y ago
      [deleted]
    - skilled 4y ago
      They don't. The web version is a viewer not an editor.
      - azinman2 4y ago
        Interesting. I always thought it was an editor. Given it can preview I’m guessing they’re working towards a web editor too.
- hn_throwaway_99 4y ago
  Sketch is perhaps most analogous, but I remember a couple years ago where designers left Sketch in droves to move to the better features of Figma. If Adobe thought Sketch was a competitive risk, they'd be buying them instead.
samsolomon 4y ago

kriops 4y ago

There is probably a triple-digit number of legitimate competitors out there.

azinman2 4y ago
For sure not triple digit legitimate competitors. To be legitimate competitor means some very mature software / service. I can think of Sketch and Adobe XD, maybe Balsamiq but not quite the same. What are these 100 extra well formed alternatives?

yummybear 4y ago

The key word is "substantially" - there are plenty other competitors.

hn_throwaway_99 4y ago
There may be "plenty" of other competitors, but I think it's pretty undeniable that Figma is the "up-and-coming" (or maybe it already got there) market leader among "design tools for web design". I also think it's pretty apparent that Adobe knows this and that's why they want to buy them. This is the exact same pattern as Facebook buying Instagram, and heck the same as some of Adobe's previous acquisitions, where large corporations buy out competitors that could potentially overtake them. If antitrust means anything it should block these types of acquisitions.

solardev 4y ago

Does the FTC even do anything anymore...? I can't remember a single significant enforcement action in my lifetime.

js2 4y ago
The FTC blocks mergers all the time. Here’s some in the news: https://khn.org/news/article/biden-ftc-block-hospital-mergers-antitrust/ https://khn.org/news/article/biden-ftc-block-hospital-merger... https://www.airandspaceforces.com/ftc-blocks-merger-of-lockheed-and-aerojet-rocketdyne/ https://www.airandspaceforces.com/ftc-blocks-merger-of-lockh... https://www.nasdaq.com/articles/nvidia-and-arm-merger-deal-blocked-by-ftc-on-competition-grounds https://www.nasdaq.com/articles/nvidia-and-arm-merger-deal-b... https://www.housingwire.com/articles/50114-ftc-moves-to-block-12-billion-merger-of-fidelity-national-and-stewart/ https://www.housingwire.com/articles/50114-ftc-moves-to-bloc... https://www.legalbettingonline.com/news/daily-fantasy-sports-merger-blocked-by-ftc/ https://www.legalbettingonline.com/news/daily-fantasy-sports... Mostly the FTC’s work happens quietly and unnoticed, but there are annual reports here: https://www.ftc.gov/policy/reports/annual-competition-reports https://www.ftc.gov/policy/reports/annual-competition-report... And you can search merger actions here: https://www.ftc.gov/enforcement/merger-review https://www.ftc.gov/enforcement/merger-review
- solardev 4y ago
  Are there any significant historical cases? The Nvidia and Arm one seems like a big deal (if it succeeds), but the others just seem like random low-hanging fruit. I feel like the ones that matter (ISPs, cell phone carriers gobbling each other up, the Microsoft/Facebook/Adobes of the world, AMD buying ATI...) never really get stopped.
  - deleted 4y ago
    [deleted]
  - js2 4y ago
    AT&T/T-Mo blocked: https://www.justice.gov/opa/pr/justice-department-files-antitrust-lawsuit-block-att-s-acquisition-t-mobile https://www.justice.gov/opa/pr/justice-department-files-anti... https://en.wikipedia.org/wiki/Attempted_purchase_of_T-Mobile_USA_by_AT%26T https://en.wikipedia.org/wiki/Attempted_purchase_of_T-Mobile... T-Mo/Sprint would have been blocked (and fell apart multiple times) if not for the Trump administration: https://en.wikipedia.org/wiki/Merger_of_Sprint_Corporation_and_T-Mobile_US https://en.wikipedia.org/wiki/Merger_of_Sprint_Corporation_a... I think you’re undervaluing the significance of the FTC’s everyday work, but I’ll agree with your the Federal government has not been aggressive enough in exercising its anti-trust authority.