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    Home»Technology»Adobe Sued by FTC Over Deceptive Subscription Practices
    Technology

    Adobe Sued by FTC Over Deceptive Subscription Practices

    The US Federal Trade Commission (FTC) has filed a lawsuit against Adobe Inc., alleging that the software giant has been violating consumer protection laws by making it excessively difficult for customers to cancel their subscriptions. This lawsuit comes after a two-year review of Adobe's pricing practices and subscription terms, and it marks a significant development in the ongoing scrutiny of subscription-based business models.
    Zayne PhamBy Zayne PhamJune 18, 2024No Comments4 Mins Read3 Views
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    Allegations Against Adobe

    The FTC’s lawsuit claims that Adobe has been misleading consumers by not adequately disclosing the terms of its annual subscription plans. Customers are often enticed to sign up for these plans without realizing that canceling within the first year can incur hefty early termination fees (ETFs) amounting to hundreds of dollars. The complaint accuses Adobe of hiding these crucial terms in fine print and behind optional textboxes and hyperlinks, making them easy to overlook during the sign-up process.

    Credit: Adobe.

    One of the central issues highlighted by the FTC is Adobe’s use of hidden ETFs. The lawsuit alleges that Adobe only makes these fees clear during the cancellation process, often ambushing customers who attempt to terminate their subscriptions. The FTC claims that Adobe’s online cancellation process is deliberately convoluted, requiring users to navigate through multiple pages and deal with persistent pop-ups. Additionally, those who try to cancel via phone or live chat reportedly face frequent disconnections and repeated requests to explain their reasons for cancellation.

    Using “Dark Pattern” UI design, Adobe made it harder for their users to cancel their subscription. And with fees not being properly display, many users who did not read the fine-print will acute up to hundreds of dollars from cancelation fees without even noticing them. (Credit: Adobe)

    Regulatory Scrutiny and Customer Complaints

    The FTC’s investigation into Adobe’s practices began in earnest last year, prompted by numerous consumer complaints. Users have reported being trapped in subscription plans due to the high cost of early termination and the difficulties associated with canceling. The complaint also points out that Adobe’s transition from selling lifetime licenses to a subscription-based model in 2012 has led to widespread frustration among creative professionals who rely on Adobe’s software.

    1. @FTC has taken action against Adobe and two executives for pushing people into subscriptions and then making it absurdly hard to cancel.

    Adobe ambushed users with hefty "early termination fees" and threw up obstacles when people tried to cancel.https://t.co/lyWAv4GMm1

    — Lina Khan (@linamkhan) June 17, 2024

    Customers have taken to social media and the Better Business Bureau (BBB) to voice their grievances. Many describe a cancellation process that feels like an “unending loop,” with support calls frequently being dropped. One customer, Vicky K., shared her experience of a phone call where the connection kept dropping, making it impossible to cancel the subscription. Another user, Seth L., labeled the process as “horrible, predatory,” detailing multiple failed attempts to cancel and the subsequent high cancellation fees.

    According to the FTC, Adobe’s actions constitute violations of the Restore Online Shoppers’ Confidence Act (ROSCA) and the FTC Act. ROSCA requires clear disclosure of all material terms of a transaction, and Adobe’s alleged failure to do so with its ETFs may constitute a breach of this law. The FTC is seeking to permanently prohibit Adobe from continuing these practices and to impose financial penalties for each violation.

    The lawsuit filed by the FTC not only targets Adobe but also names two of its executives, Maninder Sawhney, Senior Vice President of Digital Go-to-Market and Sales, and David Wadhwani, President of Adobe’s Digital Media Business. The complaint accuses these executives of overseeing and participating in the deceptive practices.


    Adobe’s Response

    Adobe has responded to the lawsuit, asserting that its subscription services are designed to be “convenient, flexible, and cost-effective.” Dana Rao, Adobe’s General Counsel and Chief Trust Officer, stated that Adobe is transparent with its terms and conditions and that the company will defend its business practices in court. Rao emphasized that Adobe prioritizes a positive customer experience and maintains that the cancellation process is straightforward.

    Sharing an update on changes and clarifications coming to Adobe's Terms of Use to address customer concerns. As technology evolves, so must our Terms of Use. Learn more: https://t.co/NYx1LjAYPd pic.twitter.com/Ci1IX6XCpZ

    — Adobe (@Adobe) June 10, 2024
    You can read Adobe’s full response here.

    The FTC’s lawsuit against Adobe underscores the growing regulatory scrutiny over subscription-based business models and the transparency of their terms. As the case unfolds, it will likely prompt other companies to reevaluate their own subscription practices to avoid similar legal challenges. For consumers, this lawsuit represents a significant step towards greater protection against deceptive subscription practices and hidden fees.


    Adobe’s New Terms of Use Spark Outrage Amongst Photoshop Users

    Adobe FTC
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