Lina Khan Uses Figma’s IPO to Justify Stricter M&A Regulations

A notable ally is commending Figma’s remarkable IPO: Lina Khan, the ex-chair of the Federal Trade Commission.

On Friday afternoon, Khan posted on X, sharing a link to an article that showcased Figma’s successful market debut, noting that the IPO serves as “a powerful reminder that permitting startups to evolve into independent entities, rather than letting larger corporations absorb them, can generate significant value.”

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

During her tenure at the FTC, Khan led efforts to scrutinize Big Tech’s takeovers of startups—promoting “reverse acqui-hires,” where companies retain essential talent and license technology instead of merely purchasing startups. (This trend seems to continue even after Khan’s departure from the FTC.)

Despite experiencing significant resistance from some areas of the tech sector, Khan stood firm in her convictions, arguing that only a few deals received “a second look,” and asserting that founders could thrive in “a marketplace with six, seven, or eight potential buyers” instead of “just one or two.”

Although Khan—nominated by President Joe Biden—resigned when the Trump administration started its second term, her remarks on Friday framed the Figma IPO as a testament to her ideology, referring to it as “a triumph for employees, investors, innovation, and the public.”

Critics of Khan, however, often credit Figma’s success to innovation unencumbered by regulatory hurdles rather than as a result of regulatory interventions. Dan Ives, an analyst at Wedbush Securities, commented to Business Insider, “Figma is an extraordinary success, but it stems from the company’s innovative strides and not from the FTC or Khan.”