The US government is cracking down on Adobe’s subscription practices. The Federal Trade Commission (FTC) filed a lawsuit alleging Adobe misled customers with hidden fees and made canceling subscriptions a nightmare.
According to the FTC, Adobe pushed users towards “annual paid monthly” plans without disclosing hefty early termination fees (ETFs) if they canceled early. These fees could reach hundreds of dollars. On top of that, canceling a subscription was said to be a convoluted process involving navigating numerous webpages, dealing with dropped calls and chats, and facing multiple transfers with customer service representatives.
The lawsuit claims these practices went on for years, even after the FTC received complaints from customers. Adobe offers a variety of software subscriptions, with prices ranging from under $5 to nearly $60 per month. The FTC alleges Adobe hid the ETFs, which could be as high as 50% of the remaining monthly payments in a year, in fine print or buried behind small icons on their website.
Adobe denies the allegations and claims their subscriptions are transparent and cancellations are simple. However, with subscription revenue making up 95% of their income, the FTC’s lawsuit could have a significant impact on the company. The FTC is suing under the Restore Online Shoppers’ Confidence Act, which prohibits hidden fees and requires clear customer consent for subscription renewals and termination fees. The lawsuit seeks penalties, an injunction to stop these practices, and other remedies. This follows a similar case against Amazon for deceptive practices with Prime memberships.
