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Figma’s IPO Sparks Debate on Tech Regulation as Lina Khan Claims Victory
August 2, 2025
Figma’s blockbuster IPO is making waves beyond Wall Street — it’s also reigniting a fierce debate over how startup acquisitions should be regulated. One of the most unexpected voices celebrating the design platform’s public debut is Lina Khan, the former chair of the Federal Trade Commission.
On Friday, Khan took to social media to highlight Figma’s strong market performance and framed it as a testament to the value of keeping promising startups independent. “A great reminder that letting startups grow into independently successful businesses, rather than be bought up by existing giants, can generate enormous value,” she wrote.
Her comments refer to Adobe’s failed $20 billion bid to acquire Figma in 2023 — a deal that collapsed under mounting regulatory pressure. While Adobe cited uncertainty around approvals from European and U.K. regulators, the proposed acquisition also faced scrutiny in the U.S., where concerns were raised about the impact on competition in the creative software market.
At the time, Khan was at the helm of the FTC, leading a broader campaign to curb what she saw as anticompetitive behavior by major tech firms. Her efforts pushed companies to explore alternative strategies, such as “reverse acqui-hires,” where key personnel are hired and technology licensed, sidestepping direct acquisitions. That trend, it seems, persists even after her departure from the agency.
Despite criticism from the tech industry for her aggressive tactics, Khan consistently defended her approach. She emphasized that most deals passed without intervention and argued that a more competitive environment ultimately benefits startup founders by increasing their options for growth and investment.
Khan, who stepped down at the start of the second Trump administration, now sees Figma’s IPO as a vindication of her regulatory philosophy. In her words, the outcome is “a win for employees, investors, innovation, and the public.”
Not everyone agrees. Detractors argue Figma succeeded in spite of, not because of, regulatory interference. As Wedbush Securities analyst Dan Ives put it, “Figma is a massive success, but it’s because of the company’s innovative growth and not due to the FTC and Khan.”
Regardless of where one stands, Figma’s IPO has reignited a critical conversation about the future of tech regulation — and whether bold enforcement or market freedom ultimately drives innovation.
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