Lina Khan Points to Figma IPO as Rationale for M&A Regulation

An unlikely advocate is celebrating Figma’s impressive IPO: Lina Khan, the former chair of the Federal Trade Commission.

On Friday afternoon, Khan posted on X, linking to an article about Figma’s outstanding stock market debut, and remarked that the IPO serves as “a strong reminder that enabling startups to develop into independently successful companies, rather than being consumed by established giants, can yield significant value.”

Khan referred to the proposed $20 billion acquisition of Figma by Adobe, which fell through in 2023. Adobe cited a lack of a “clear path” to securing approval from the European Commission and the U.K. Competition and Markets Authority, while the acquisition also faced regulatory pushback in the U.S. due to concerns that it could impair Figma’s ability to compete effectively with Adobe.

During that period, Khan was leading the FTC, guiding the agency in its efforts to challenge Big Tech over startup acquisitions—encouraging companies to pursue “reverse acqui-hires,” where they recruit key talent and license technology instead of directly purchasing startups. (This practice seems to persist even after Khan’s departure from the FTC.)

Although her firm stance faced considerable backlash from parts of the tech sector, she countered by highlighting that only a small percentage of deals received “a second look,” arguing that founders would be better off in “a market with six or seven or eight potential buyers” rather than “just one or two.”

Even though Khan—appointed by President Joe Biden—resigned at the start of the second Trump administration, her comments on Friday framed the Figma IPO as a validation of her approach, calling it “a win for employees, investors, innovation, and the public.”

Unsurprisingly, Khan’s critics are more likely to interpret Figma’s success as stemming from innovation free of regulatory influence, rather than a consequence of it. Wedbush Security analyst Dan Ives noted to Business Insider, “Figma is a significant success, but it’s attributed to the company’s innovative growth and not as a result of the FTC and Khan.”