Adobe sued by US regulators over subscription cancellation fees

(Bloomberg) — The U.S. Federal Trade Commission sued Adobe Inc., alleging the software maker violated consumer protection laws by making it too difficult for consumers to cancel their subscriptions.

Adobe has pushed users toward annual subscriptions to its creative software such as Photoshop without “adequately disclosing” that canceling the first year could cost hundreds of dollars, the FTC said in a statement Monday. The San Jose, Calif.-based company also designed the cancellation process to be difficult, requiring navigation through numerous online pages or handoffs between customer service representatives, regulators said.

“Adobe trapped its customers into year-long subscriptions through hidden early termination fees and numerous barriers to cancellation,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. The Justice Department filed the complaint in federal court in California on behalf of the FTC, which enforces U.S. consumer protection laws.

An Adobe spokesperson did not immediately respond to a request for comment.

Users of Adobe products have long complained about the expense of canceling a subscription. Access to Adobe’s suite of applications can cost individuals more than $700 a year. Subscribers must cancel within two weeks of purchasing a subscription to receive a full refund; otherwise, they incur a pro-rata penalty. Some other digital services such as those from Spotify Technology SA and Netflix Inc. do not charge cancellation fees.

The lawsuit alleges that Adobe’s tactics violate a 2010 consumer protection law designed to protect online shoppers.

Last year, the FTC sued Amazon.com Inc. under the same law for allegedly deceiving consumers into signing up for its Prime membership service and deliberately making it difficult to cancel.

Adobe revealed in December that the FTC was investigating its subscription practices.