Lina Khan Uses Figma’s IPO 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 posted on X, linking to an article about Figma’s successful entrance into the market. She emphasized that the IPO serves as “a strong reminder that fostering startups as independent entities rather than allowing larger companies to acquire them can create substantial value.”

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

During her tenure at the FTC, Khan led efforts to scrutinize the acquisitions of startups by major tech firms, promoting “reverse acqui-hires” that would allow companies to retain key talent and license technology rather than simply merging with the startups. (This strategy seems to persist even after her leaving the FTC.)

Despite encountering considerable resistance from certain segments of the tech industry, Khan remained unwavering in her convictions, contending that only a handful of deals received “a second look” and stressing that entrepreneurs could thrive in “a market with six, seven, or eight potential buyers” instead of “just one or two.”

Although Khan—who was appointed by President Joe Biden—resigned at the outset of the Trump administration’s second term, her remarks on Friday framed the Figma IPO as a validation of her philosophy, declaring it “a win 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 a tremendous success, but it results from the company’s innovative progress, not from the FTC or Khan.”