FTC sues Adobe, alleging hidden subscription cancellation fees

The Department of Justice filed a complaint in the U.S. District Court for the Northern District of California on behalf of the FTC, alleging that Adobe hid from consumers that they would be subject to fees for canceling a subscription . Adobe violated the Restore Online Shoppers’ Confidence Act (ROSCA), the agencies alleged.

Maninder Sawhney, president of Adobe, and David Wadhwani, vice president of Adobe, were also named in the complaint.

Adobe said it plans to fight the charges.

The FTC began investigating Adobe’s subscription fees and cancellation policies in 2022. In November, the FTC informed Adobe that it may face consent negotiations regarding its subscription fees.

Adobe launched a subscription service in 2013 and it now accounts for most of the company’s revenue, the FTC said. Adobe steered consumers toward annual subscriptions, paid month-to-month, without adequately disclosing that they could face hundreds of dollars in fees if canceled before the end of the year. Information about the fees, which is 50 percent of the cost of the remaining months during the plan’s 12 months, is in small print on Adobe’s website, the FTC said.

Adobe received numerous complaints about the fees, its cancellation process and poor disclosure of fees, but did not resolve the problem, the FTC claimed. The company also ignored the FTC, the agency claimed.

“Defendants continued to engage in at least some of their illegal practices even after becoming aware in 2022 of the FTC’s investigation into possible ROSCA violations related to inadequate disclosures and complex cancellation mechanisms.” , the FTC said in the complaint.

The FTC is seeking compensation for consumers who paid cancellation fees, as well as monetary penalties.

“Adobe trapped its customers into year-long subscriptions through hidden early termination fees and numerous barriers to cancellation,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement Press. “Americans are tired of companies hiding the ball when signing up for a subscription, then putting up roadblocks when trying to cancel. The FTC will continue to work to protect Americans from these illegal business practices.

“Our priority is to always ensure our customers have a positive experience,” said Dana Rao, Adobe general counsel and chief trust officer. “We are transparent about the terms and conditions of our subscription contracts and have a simple cancellation process. We will refute the FTC’s claims in court.