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

Lina Khan, the former chair of the Federal Trade Commission, is praising the remarkable IPO of Figma.

On Friday afternoon, Khan shared her views on Figma’s successful public offering through X. She noted that the IPO acts as “a strong reminder that nurturing startups as independent entities, rather than letting larger corporations absorb them, can create substantial value.”

Khan referenced Adobe’s unsuccessful attempt to acquire Figma for $20 billion in 2023, raising concerns about the lack of “a clear pathway” for approval from the European Commission and the U.K. Competition and Markets Authority. She also mentioned regulatory hurdles in the U.S., concerning a potential decline in Figma’s competitiveness against Adobe.

During her time at the FTC, Khan led initiatives to investigate mergers between startups and major tech firms, advocating for “reverse acqui-hires,” which enable companies to keep critical talent and license technology instead of merging with startups. This perspective seems to endure even after her exit from the FTC.

Despite facing significant opposition from certain sectors of the tech industry, Khan stood firm, claiming that only a few transactions received “a second look,” and asserting that entrepreneurs would thrive in “a marketplace with six, seven, or eight potential buyers,” rather than “just one or two.”

While Khan—appointed by President Joe Biden—resigned at the start of Trump’s second term, her remarks on Friday mirrored her beliefs, describing the Figma IPO as “a triumph for employees, investors, innovation, and the public.”

However, Khan is facing criticism, with some attributing Figma’s success more to its innovative practices than to regulatory actions. Dan Ives, an analyst at Wedbush Securities, told Business Insider, “Figma is an incredible success, but it stems from the company’s innovative advancements, not from the FTC or Khan.”