The US government has filed a lawsuit against software giant Adobe, alleging violations of consumer protection laws related to “hidden” termination fees and a complex cancellation process.
The Federal Trade Commission (FTC) accused Adobe of failing to adequately disclose its terms to customers, including the duration of subscription commitments and the fees associated with early cancellation.
According to the complaint, Adobe allegedly declined to address these issues, citing potential financial repercussions. Adobe has contested these allegations and stated its intention to contest the lawsuit.
“We are transparent with the terms and conditions of our subscription agreements and have a simple cancellation process,” said Dana Rao, general counsel and chief trust officer.
“We will refute the FTC’s claims in court,” he said.
Adobe, established in 1982, is renowned for its software suite used for photo and PDF editing, notably Adobe Photoshop. Around 2012, it shifted to a subscription-based sales model, requiring customers to pay either monthly or annually.
However, according to the complaint, the company’s sign-up process lacks clarity. It allegedly fails to disclose to customers that they are committing to a year-long payment obligation and does not clearly state the cost of early cancellation, which can amount to hundreds of dollars.
Furthermore, if customers attempt to cancel, Adobe purportedly subjects them to a convoluted process, requiring password re-entry and navigating through multiple pop-up screens.
“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a press announcement.
“Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel,” Mr Levine added.
The practices outlined in the complaint bear resemblance to those identified in a lawsuit against Amazon last year and have resulted in numerous complaints to entities such as the Better Business Bureau.
According to the complaint filed in federal court in California, some customers believed they had successfully completed the cancellation process, only to continue being charged.
In addition to Adobe, the complaint also names Maninder Sawhney, senior vice president of digital go-to-market & sales since 2018, and David Wadhwani, president of Adobe’s digital media business.
The government stated that it began investigating the issue in 2022 but alleged that the defendants repeatedly chose not to rectify Adobe’s unlawful practices due to their financial implications.
The government is seeking a court order to prohibit Adobe from continuing these practices and is requesting financial penalties for each violation of the law.
