HomeWinBuzzer NewsDOJ Sues Adobe Over Misleading Subscription Practices

DOJ Sues Adobe Over Misleading Subscription Practices

The legal action could set a precedent, encouraging other businesses to adopt clearer, more straightforward practices.

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The United States Department of Justice (DOJ) has filed a lawsuit accusing of employing misleading subscription tactics. According to the Federal Trade Commission (FTC), who is behind the lawsuit, Adobe trapped consumers in its lucrative subscription plans without making key terms—particularly cancellation fees—clear to them.

“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 FTC will continue working to protect Americans from these illegal business practices.”

The lawsuit is part of a broader DOJ initiative to enforce consumer protection laws. The action against Adobe reflects the government's resolve to hold companies accountable for practices that negatively affect consumers. The DOJ is seeking injunctive relief, civil penalties, equitable monetary relief, and other remedies to address the alleged issues.

Scrutiny on Subscription Model

Since shifting to a subscription-based model in 2012, Adobe has seen a significant uptick in revenue compared to its previous one-time fee structure. However, the DOJ claims that Adobe has hidden the specifics of its annual, paid monthly subscription plans in fine print, resulting in consumers not fully realizing the financial obligations they are incurring.

The subscription model of the company has consistently been a source of frustration for creatives, who feel compelled to maintain their subscriptions to Adobe to continue their work. This month, Adobe's updated terms of service sparked controversy as some viewed it as a chance for the company to use their artwork to train its AI.

Cumbersome Cancellation Process

The DOJ's complaint points out that Adobe enforces a complex and discouraging cancellation process. Consumers attempting to cancel face a “difficult and intricate” procedure, often leading them to encounter unexpected early termination fees that can run into hundreds of dollars. The DOJ argues that these tactics effectively trap consumers in long-term subscriptions.

The lawsuit also implicates certain Adobe executives, such as Maninder Sawhney, Senior Vice President of Digital Go-to-Market and Sales, and David Wadhwani, President of Adobe's Digital Media division. The DOJ alleges these executives have facilitated the deceptive practices in question.

Samuel Levine, head of the Federal Trade Commission's Bureau of Consumer Protection, highlighted that Adobe's actions have left consumers stuck with unwanted subscriptions, facing hidden fees and complicated cancellation methods. Levine emphasized that the lawsuit seeks to rectify these violations and push for greater transparency in subscription services.

Adobe's Stand

Responding to the allegations, Adobe's General Counsel and Chief Trust Officer, Dana Rao, stated that the company intends to fight the claims in court. Rao asserted that Adobe aims to offer a positive customer experience and is transparent about its subscription terms and conditions. Rao claimed Adobe provides a straightforward cancellation process, countering the DOJ's claims.

“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.”

The Adobe case is part of wider federal scrutiny into corporate subscription practices. The Federal Trade Commission (FTC) has been actively investigating companies with potentially misleading subscription models. The legal action could set a precedent, encouraging other businesses to adopt clearer, more straightforward practices.

SourceFTC
Markus Kasanmascheff
Markus Kasanmascheff
Markus is the founder of WinBuzzer and has been playing with Windows and technology for more than 25 years. He is holding a Master´s degree in International Economics and previously worked as Lead Windows Expert for Softonic.com.