Image: Flickr User Gabriel Walt / CC 2.0 License

The US Federal Trade Commission (FTC) now has Adobe in its radar, as it files a lawsuit against the software giant, accusing it of violating consumer protection laws. The lawsuit alleges that Adobe has made it excessively difficult for customers to cancel their subscriptions, leading to significant financial penalties for those attempting to terminate their contracts prematurely.

The lawsuit, filed by the Department of Justice (DOJ) on behalf of the Federal Trade Commission (FTC), centers on Adobe’s “Annual, Paid Monthly” (APM) subscription plan. This plan offers access to Adobe’s popular creative software suite, but it’s the way this plan is presented and the complexities associated with cancellation that have drawn the ire of regulators. For one, the FTC contends that Adobe steers users towards the APM plan without adequately disclosing its key details. In fact, the plan locks customers into a year-long commitment, despite the “paid monthly” moniker. This can lead users to believe they are subscribing on a flexible, month-to-month basis, only to discover they’re financially obligated for a full year.

The lawsuit further accuses Adobe of concealing the hefty early termination fees (ETFs) associated with canceling the APM plan within the first year. These fees can reach hundreds of dollars, creating a significant financial barrier for users who wish to exit the subscription before the year is up. The FTC alleges that Adobe fails to prominently disclose these fees during the signup process. The lawsuit, filed in a California federal court, alleges that Adobe’s actions violate the Restore Online Shoppers’ Confidence Act (ROSCA), a law that was designed to protect online consumers.

To add to this, Adobe allegedly employs deceptive tactics to hide the ETF details. The information is allegedly buried in fine print, often hidden behind hyperlinks or optional textboxes. And even if users become aware of the hidden commitment and hefty ETF, the government alleges that Adobe throws up additional hurdles to prevent cancellation. The cancellation process is described as convoluted and deliberately complex, requiring users to navigate through multiple screens and potentially engage with customer service representatives.

In response to the lawsuit, Adobe has stated that it plans to challenge 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. 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. We will refute the FTC’s claims in court,” Dana Rao, General Counsel and Chief Trust Officer, commented on the matter.

Despite these claims, the FTC’s allegations suggest otherwise, pointing to a long history of consumer complaints regarding Adobe’s subscription practices. For years, Adobe users have expressed dissatisfaction with the costs associated with canceling subscriptions. Accessing Adobe’s suite of applications can cost over $700 annually for individuals, and subscribers must cancel within two weeks of purchase to receive a full refund. Beyond this initial period, users face a prorated penalty, which is often not clearly disclosed upfront. For now, the Department of Justice (DOJ) is seeking injunctive relief, civil penalties, and other forms of monetary relief.