The US government has sued Adobe and two top company executives for allegedly misleading consumers by hiding early termination fees and forcing them to jump through hoops to cancel subscriptions to Adobe products.
He complaint filed by the Justice Department on Monday accuses Adobe of pushing consumers toward its “annual paid monthly” subscription plan without adequately disclosing that canceling the plan within the first year could result in an early termination fee. The lawsuit also alleges that Adobe's early termination fee disclosures were hidden in fine print or required consumers to hover over small icons to find them.
“Americans are tired of companies hiding the ball during subscription sign-up and then putting up roadblocks when they try to cancel,” said Samuel Levine, director of the FTC's Bureau of Consumer Protection, in a statement. “The FTC will continue to work to protect Americans from these illegal business practices.”
Dana Rao, Adobe's general counsel and chief fiduciary officer, said the company would fight the FTC in court. in a statement Posted on the company's website, Rao said: “Subscription services are convenient, flexible and cost-effective to allow users to choose the plan that best suits their needs, schedule and budget. Our priority is to always ensure that our customers have a positive experience, we are transparent with the terms and conditions of our subscription agreements and we have a simple cancellation process. We will reject FTC claims in court.”
The FTC said it took action against Adobe after receiving complaints from consumers across the country who said they were unaware of Adobe's early termination fee. He noted that Adobe continued the practice despite being aware of consumer confusion. Any consumer who contacted Adobe customer service to cancel their subscription encountered other obstacles, such as dropped calls and chats and being transferred to multiple representatives, the FTC statement added.
The FTC's action follows a wave of customer outrage over Adobe's latest terms of service. The users were concerned that Adobe's vague language suggested the company could freely use its work to train its generative ai modes. In response to the backlash, Adobe announced updates to its terms of service to provide more details in areas such as artificial intelligence and content ownership.
Update, June 17, 2024, 1:39 pm ET: This story was updated with a statement from Adobe.
