Compliance Monitoring

US Sues Adobe for Hiding Fees, Making Subscriptions Hard to Cancel

June 17, 2024 at 7:30:12 PM

TL;DR The US government is suing Adobe for allegedly hiding fees and making cancellations difficult. The Department of Justice claims Adobe enrolled consumers in its most lucrative plan without clear terms, hid early termination fees, and created a complicated cancellation process. The lawsuit also targets executives Maninder Sawhney and David Wadhwani. Adobe’s subscription model has long frustrated users and faces continued regulatory scrutiny.

US Sues Adobe for Hiding Fees, Making Subscriptions Hard to Cancel

The US government has filed a lawsuit against Adobe, alleging that the company has been deceptive in its subscription practices. The Department of Justice (DOJ) claims that Adobe has enrolled consumers in its most profitable subscription plans without clearly disclosing important terms, particularly the early termination fees. These fees, which can amount to hundreds of dollars, are allegedly hidden in fine print and behind optional textboxes and hyperlinks.

Allegations Against Adobe

Hidden Fees: Adobe is accused of not properly disclosing the early termination fees associated with its annual, paid monthly plans.
Complicated Cancellation Process: The DOJ alleges that Adobe has made the cancellation process excessively difficult, requiring customers to navigate multiple webpages and pop-ups.
Ambush Tactics: Customers are reportedly "ambushed" with early termination fees when they attempt to cancel, discouraging them from doing so.
Phone and Live Chat Issues: Similar obstacles are encountered when customers try to cancel via phone or live chat, with calls or chats being dropped or disconnected.

Targeted Executives

The lawsuit also names Adobe executives Maninder Sawhney and David Wadhwani, alleging that they had control over or participated in these deceptive practices.

Regulatory Scrutiny

FTC Statement: Samuel Levine, director of the FTC’s Bureau of Consumer Protection, criticized Adobe for trapping customers in year-long subscriptions through hidden fees and numerous cancellation hurdles.
Historical Context: Adobe switched from selling lifetime licenses to a subscription model in 2012, which has been a point of frustration for many users.
Recent Backlash: Adobe faced backlash earlier this month over new terms of service that some interpreted as a move to train its AI on users' art.
Previous Antitrust Issues: In 2022, Adobe attempted to acquire Figma for $20 billion but abandoned the deal due to antitrust scrutiny from European regulators.

The lawsuit highlights ongoing regulatory scrutiny of Adobe's business practices, particularly concerning consumer protection and antitrust issues.