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

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

On Friday afternoon, Khan posted on X, citing an article that showcased Figma’s exceptional stock market debut, remarking that the IPO serves as “a powerful reminder that enabling startups to evolve into independent firms, rather than letting larger corporations absorb them, can create significant value.”

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

During her tenure at the FTC, Khan led efforts to investigate Big Tech’s acquisitions of startups—advocating for “reverse acqui-hires,” where companies keep critical talent and license technology instead of merely acquiring startups. (This trend seems to continue even after Khan’s exit from the FTC.)

In the face of considerable pushback from parts of the tech industry, Khan maintained her stance, asserting that only a minor fraction of deals received “a second look,” emphasizing that founders would flourish in “a market with six, seven, or eight potential buyers” instead of “just one or two.”

Although Khan—appointed by President Joe Biden—departed her position at the start of the second Trump administration, her comments on Friday framed the Figma IPO as a reinforcement of her philosophy, describing it as “a triumph for employees, investors, innovation, and the public.”

Critics of Khan, however, frequently attribute Figma’s achievements to innovation unhindered by regulatory pressures, rather than regulatory factors. Dan Ives, an analyst at Wedbush Securities, remarked to Business Insider, “Figma is an outstanding success, but it stems from the company’s innovative progression and not from the FTC or Khan.”