U.S. sues Adobe over deceptive subscription practices and hidden cancellation fees

The US Federal Trade Commission (FTC) has filed a lawsuit against Adobe, alleging that the company deceives consumers with hard-to-cancel subscription plans. The FTC claims Adobe conceals early termination fees (ETFs) for its software subscriptions, making it difficult for consumers to be aware of these charges. Adobe, which has relied on subscription revenue for over a decade, pushes consumers toward an "annual paid monthly" plan, where the commitment is for a year but payments are made monthly.

According to the lawsuit, consumers attempting to cancel their subscriptions before the year's end face high ETFs, amounting to 50% of the remaining payments. The FTC states that disclosures about these fees are buried on Adobe's website, often in small print or hidden behind small icons. Numerous complaints from consumers to the FTC and the Better Business Bureau indicate widespread issues with these practices. The FTC asserts that Adobe is aware of these complaints but continues with the same subscription structure and concealment of ETFs.

The lawsuit also claims Adobe makes the cancellation process exceedingly difficult, forcing consumers to navigate numerous web pages or face resistance and delays from customer service. Consumers report obstacles such as dropped calls, chat disconnections, and multiple transfers when trying to cancel their subscriptions, with some finding continued charges even after they believed they had canceled. The FTC contends that Adobe's actions violate the Restore Online Shoppers’ Confidence Act, a US law designed to protect consumers in online transactions.

The lawsuit comes just a few days after the company was embroiled in controversy over new Photoshop ToS granting unlimited access to user projects, and a little more than 6 months since Adobe abandoned its attempt to acquire Figma for $20 billion after facing antitrust scrutiny from European regulators.