Image: © JHVEPhoto/Stock.adobe.com
The lawsuit claims Adobe pushes consumers to a subscription plan that has hidden cancellation fees and that it has made cancelling a subscription difficult.
The US Federal Trade Commission (FTC) is suing software giant Adobe for allegedly deceiving consumers with hidden fees and subscriptions that are difficult to leave.
The lawsuit – filed by the US Department of Justice – claims Adobe hid an early termination fee for its most popular subscription plan. The FTC says Adobe “pushed” consumers into this “annual paid monthly” subscription without adequately disclosing that an early cancellation can cost hundreds of dollars.
The complaint alleges that Adobe uses these early termination fees to “ambush” customers and deter them from cancelling their subscriptions. The FTC also alleges that Adobe has designed its site to make it difficult for customers to cancel their subscriptions.
These alleged difficulties include having to navigate numerous web pages to cancel, facing resistance from Adobe customer service staff and encountering dropped calls and chats. The FTC says some consumers who thought they had successfully cancelled their subscription later reported that the company continued to charge them.
“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles,” said FTC Bureau of Consumer Protection director Samuel Levine. “Americans are tired of companies hiding the ball during subscription sign-up and then putting up roadblocks when they try to cancel. The FTC will continue working to protect Americans from these illegal business practices.”
The FTC complaint charges that Adobe’s practices violate the US Restore Online Shoppers’ Confidence Act and the commission is seeking relief and civil penalties against Adobe and two of its executives – Maninder Sawhney and David Wadhwani.
In response to the FTC complaint, Adobe’s general counsel and chief trust officer Dana Rao said the company will refute the FTC’s claims in court.
“Subscription services are convenient, flexible and cost effective to allow users to choose the plan that best fits their needs, timeline and budget,” Rao said. “Our priority is to always ensure our customers have a positive experience.
“We are transparent with the terms and conditions of our subscription agreements and have a simple cancellation process.”
Adobe faced significant legal hurdles between 2022 and 2023 when it attempted to acquire web-based design platform Figma for roughly $20bn. Adobe said it would boost its creative collaboration tech offering through this deal.
But the planned merger was soon marred with investigations from multiple regulatory authorities, including the UK’s Competition and Markets Authority and the European Commission. Adobe abandoned the deal last December and agreed to pay Figma a reverse termination fee of $1bn.
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