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

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

On Friday afternoon, Khan took to X to share her insights on Figma’s triumphant market introduction. She emphasized that the IPO serves as “a compelling reminder that fostering startups as independent entities, instead of permitting larger companies to acquire them, can yield substantial value.”

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

During her time at the FTC, Khan led initiatives to evaluate mergers involving startups and major tech firms, advocating for “reverse acqui-hires,” a framework that would allow companies to retain critical talent and license technology rather than merely merging with startups. (This perspective appears to endure even after her exit from the FTC.)

Despite facing considerable opposition from certain segments of the tech industry, Khan remained resolute in her stance, contending that only a small number of transactions 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—appointed by President Joe Biden—resigned at the beginning of Trump’s second term, her remarks on Friday framed the Figma IPO as a testament to her beliefs, characterizing it as “a win for employees, investors, innovation, and the public.”

However, critics of Khan often attribute Figma’s success to its innovative prowess rather than regulatory actions. Dan Ives, an analyst at Wedbush Securities, stated to Business Insider, “Figma is an extraordinary success, but it stems from the company’s innovative achievements, not from the FTC or Khan.”