Recent regulatory actions preventing significant corporate mergers, including the proposed JetBlue-Spirit Airlines and Adobe-Figma deals, have drawn sharp commentary regarding government intervention in the economy. A prominent figure, Balaji, stated on social media, "Remember, the DOJ did bankrupt Spirit Airlines by blocking its merger with JetBlue." He further added, regarding Figma, that its survival was "not because state harassment helped!"
The $3.8 billion proposed merger between JetBlue Airways and Spirit Airlines was blocked by a federal judge in January 2024, siding with the U.S. Department of Justice (DOJ). The DOJ argued that the acquisition would reduce competition and lead to higher airfares for price-sensitive consumers by eliminating Spirit, the nation's largest ultra-low-cost carrier. The ruling highlighted concerns that JetBlue's integration of Spirit would replace low-cost seats with pricier options.
Following the court's decision, JetBlue and Spirit Airlines officially terminated their merger agreement in March 2024. Spirit Airlines has since faced significant financial challenges, with its stock price plummeting and concerns rising about its long-term viability without the merger. Both airlines had contended that the consolidation was necessary to create a stronger competitor against the "Big Four" dominant U.S. carriers.
Separately, the $20 billion acquisition of design software firm Figma by Adobe was mutually terminated in December 2023 due to insurmountable regulatory hurdles. This decision came after the European Commission and the UK Competition and Markets Authority indicated there was "no clear path" to regulatory approval. Adobe subsequently paid Figma a $1 billion breakup fee as part of the termination agreement.
Regulators expressed significant concerns that Adobe's acquisition of Figma would substantially reduce competition in the global market for product design software. They argued that the merger would stifle innovation by eliminating a key rival to Adobe's existing offerings. Despite the companies' assertions that the deal would foster collaborative creativity, regulatory bodies maintained their stance on potential monopolistic impacts.
These high-profile interventions underscore a growing trend of increased antitrust scrutiny on large mergers across various sectors. While regulators assert their actions protect consumers from higher prices and foster innovation, critics, like Balaji, suggest such "state harassment" can impede growth and even lead to the demise of companies. The ongoing debate centers on balancing market competition with the potential for strategic consolidation to enhance business capabilities.