The Federal Trade Commission (FTC) took aim at Adobe and two executives Monday for making it too difficult for consumers to cancel their subscriptions and often charging a fee to do so.
The Department of Justice filed a complaint in U.S. District Court for the Northern District of California on behalf of the FTC, alleging Adobe hid from consumers that they would be subjected to a fee for canceling a subscription. Adobe violated the Restore Online Shoppers’ Confidence Act (ROSCA), the agencies alleged.
Maninder Sawhney, Adobe president, and David Wadhwani, Adobe vice president, were also named in the complaint.
Adobe said it planned to fight the charges.
The FTC began investigating Adobe’s subscription cancellation fees and policies in 2022. In November, the FTC notified Adobe that it could face consent negotiations concerning its subscription fees.
Adobe began a subscription service in 2013 and it now accounts for most of the company’s revenue, the FTC said. Adobe steered consumers into annual subscriptions, paid by the month, without adequately disclosing that they may have to pay hundreds of dollars in fees for canceling before the end of the year. The disclosure about the fees, which equal 50 percent of the cost of any months left in the 12 months of the plan, are in small print on Adobe’s website, the FTC said.
Adobe received many complaints about the fees, its cancellation process, and its poor fee disclosure but it did not address the problem, the FTC alleged. The company has also ignored the FTC, the agency alleged.
“Defendants have continued to employ at least some of their unlawful practices even after learning in 2022 about the FTC’s investigation into possible ROSCA violations relating to inadequate disclosures and complex cancellation mechanisms,” the FTC said in the complaint.
The FTC is seeking remuneration for consumers who paid the cancellation fees, plus monetary penalties.
“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 release. “Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel. The FTC will continue working to protect Americans from these illegal business practices.”
“Our priority is to always ensure our customers have a positive experience,” said Dana Rao, Adobe general counsel and chief trust officer. “We are transparent with the terms and conditions of our subscription agreements and have a simple cancellation process. We will refute the FTC’s claims in court.
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