“While both companies believe in the competitive advantages and benefits of their union, Adobe and Figma have mutually agreed to terminate the contract,” the two groups said in a joint statement.

The two groups noted that the decision was taken “after a joint assessment of the lack of a clear path to obtaining the necessary regulatory approvals from the European Commission and the British Competition and Markets Authority”.

The two groups said in a filing with the U.S. Securities and Exchange Commission that Adobe will pay Figma $1 billion in compensation under the deal they reached Sunday to end the project.

The amount offered by Adobe (which owns several popular software programs, including Photoshop and Illustrator), was more than the estimated value of Figma during the last fundraising process.

Founded in 2012 in San Francisco, the company raised $200 million in June 2021, giving it a total valuation of $10 billion.

Adobe planned to finance the deal, half in equity and half in cash.

The British Competition and Markets Authority expressed its concerns in June, before launching an in-depth investigation in mid-July, fearing effects on the level of competition but also the “creative design” of images, videos or animation. Adobe is classified as a leading company.

The European Commission, which opened an investigation in August, considered the “possibility of restricting competition” in a preliminary opinion published on November 17.

“Adobe and Figma strongly disagree with the regulatory authorities’ recent findings, but we believe it is in our best interest to move forward independently,” Adobe president Shantanu Narine said in the statement.

In ten years, Figma, with around 850 employees, has managed to establish itself as a reference tool for many companies, including many tech giants, to the point where it competes with established companies like Adobe.