The US Government Sues Adobe Over Alleged Deceptive Practices
The US government has filed a lawsuit against Adobe, accusing the company of concealing expensive fees and making it difficult for customers to cancel subscriptions. The Department of Justice (DOJ) claims Adobe has misled consumers by enrolling them in the most expensive subscription plans without properly disclosing key terms.
Allegations and Deceptive Practices
The lawsuit states that Adobe “hides” the terms of its annual, paid monthly plan in the “fine print and behind optional textboxes and hyperlinks.” This approach allegedly obscures the early termination fee, which can be substantial, sometimes reaching hundreds of dollars.
When customers attempt to cancel, Adobe reportedly requires them to navigate through a cumbersome cancellation process involving multiple webpages and pop-ups. During this process, customers are “ambushed” with an early termination fee, which can deter them from canceling.
Similar challenges are faced by customers trying to cancel via phone or live chat. The DOJ claims these customers often experience dropped calls or disconnections and have to repeatedly explain their reasons for canceling. These practices, according to the DOJ, violate federal consumer protection laws.
Targeting Adobe Executives
The lawsuit also targets Adobe executives Maninder Sawhney, senior vice president of digital go-to-market and sales, and David Wadhwani, president of Adobe’s digital media business. The DOJ claims these executives had significant control over or directly participated in the alleged deceptive practices. Adobe has not responded to requests for comments on the lawsuit.
Related Issues and Company Practices
Adobe’s subscription model has been a source of frustration since 2012 when it shifted from selling creative software for lifetime use to a subscription-based model. This model requires users to pay monthly or yearly fees for products like Photoshop, Illustrator, and InDesign, often compelling creatives to maintain their subscriptions to continue their work.
Earlier this month, Adobe faced backlash over new terms of service that some believed allowed the company to train its AI on users’ artwork. Additionally, Adobe abandoned its $20 billion acquisition attempt of the product design platform Figma last year due to antitrust concerns from European regulators.
Consumer Protection and Regulatory Scrutiny
“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel.”
The federal government’s scrutiny of Adobe’s practices highlights ongoing regulatory attention towards ensuring consumer protection in subscription-based business models.
