Lina Khan Points to Figma’s IPO as Justification for Tighter M&A Regulations

An unexpected ally is commending Figma’s remarkable IPO: Lina Khan, the former chair of the Federal Trade Commission.

On Friday afternoon, Khan posted on X, linking to an article that showcased Figma’s stellar market debut, noting that the IPO serves as “a powerful reminder that enabling startups to evolve into independent entities, rather than permitting larger firms to engulf them, can generate significant value.”

Khan highlighted Adobe’s unsuccessful bid to acquire Figma for $20 billion in 2023. Adobe mentioned concerns about the lack of a “clear path” to obtain approval from the European Commission and the U.K. Competition and Markets Authority, as well as regulatory worries in the U.S. regarding a potential decrease in Figma’s competitive position against Adobe.

While at the FTC, Khan led efforts to examine Big Tech’s acquisitions of startups—championing the idea of “reverse acqui-hires,” where firms preserve essential talent and license technology rather than merely acquiring startups. (This trend seems to endure even after Khan’s departure from the FTC.)

Despite encountering significant resistance from parts of the tech sector, Khan remained steadfast in her convictions, arguing that only a handful of deals received “a second look,” emphasizing that founders would thrive in “a marketplace with six, seven, or eight prospective buyers” instead of “just one or two.”

Although Khan—who was appointed by President Joe Biden—resigned when the second Trump administration began, her comments on Friday framed the Figma IPO as a reaffirmation of her ideology, depicting it as “a triumph for employees, investors, innovation, and the public.”

Critics of Khan, however, often credit Figma’s success to innovation unrestricted by regulatory pressures, rather than to regulatory effects. Dan Ives, an analyst at Wedbush Securities, remarked to Business Insider, “Figma is an outstanding accomplishment, but it stems from the company’s innovative progress and not from the FTC or Khan.”