Lina Khan Uses Figma’s IPO as a Platform to Push for Stricter M&A Regulations

Lina Khan, the former chair of the Federal Trade Commission, is lauding Figma’s remarkable IPO.

On Friday afternoon, Khan took to X to share a post about Figma’s successful entry into the market. She emphasized that the IPO serves as “a powerful reminder that fostering startups as standalone entities, instead of allowing larger corporations to absorb them, can create substantial value.”

Khan noted Adobe’s unsuccessful bid to acquire Figma for $20 billion in 2023, voicing concerns about the lack of a “clear pathway” for approval from the European Commission and the U.K. Competition and Markets Authority. She also raised regulatory worries in the U.S. about a potential decline in Figma’s competitiveness relative to Adobe.

While at the FTC, Khan led initiatives to scrutinize the acquisition of startups by major tech firms, advocating for “reverse acqui-hires” that would allow firms to retain critical talent and license technology instead of merely merging with startups. (This strategy seems to persist even after her exit from the FTC.)

Despite facing significant opposition from some segments of the tech industry, Khan held firm in her views, arguing that only a small percentage of deals received “a second look,” and that entrepreneurs could thrive in “a market with six, seven, or eight potential buyers” rather than “just one or two.”

Although Khan—who was appointed by President Joe Biden—resigned at the beginning of the Trump administration’s second term, her remarks on Friday framed the Figma IPO as a validation of her beliefs, labeling it “a triumph for employees, investors, innovation, and the public.”

However, Khan’s critics often attribute Figma’s success to its innovative capabilities rather than regulatory actions. Dan Ives, an analyst at Wedbush Securities, told Business Insider, “Figma is an exceptional success, but it arises from the company’s innovative developments, not from the FTC or Khan.”