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US sues Adobe for ‘deceiving’ subscriptions that are too hard to cancel

Adobe is facing a lawsuit from the US government that accuses the software giant of hiding fees and making it difficult to cancel subscriptions.

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US sues Adobe for ‘deceiving’ subscriptions that are too hard to cancel
US sues Adobe for ‘deceiving’ subscriptions that are too hard to cancel

The US government is suing Adobe for allegedly hiding expensive fees and making it difficult to cancel a subscription. In the complaint filed on Monday, the Department of Justice claims Adobe “has harmed consumers by enrolling them in its default, most lucrative subscription plan without clearly disclosing important plan terms.”

The lawsuit alleges Adobe “hides” the terms of its annual, paid monthly plan in the “fine print and behind optional textboxes and hyperlinks.” In doing so, the company fails to properly disclose the early termination fee incurred upon cancellation “that can amount to hundreds of dollars,” the complaint says.

When customers do attempt to cancel, the DOJ alleges that Adobe requires them to go through an “onerous and complicated” cancellation process that involves navigating through multiple webpages and pop-ups. It then allegedly “ambushes” customers with an early termination fee, which may discourage them from canceling.

Customers encounter similar obstacles when attempting to cancel their subscriptions over the phone or via live chats, the DOJ alleges. The complaint claims “subscribers have had their calls or chats either dropped or disconnected and have had to re-explain their reason for calling when they re-connect.” The lawsuit alleges that these practices break federal laws designed to protect consumers.

The lawsuit also targets Adobe executives Maninder Sawhney, the senior vice president of digital go-to-market and sales, as well as David Wadhwani, the president of the company’s digital media business. The complaint says both executives “directed, controlled, had the authority to control, or participated in the acts and practices of Adobe.” Adobe didn’t immediately reply to a request for comment.

“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement. “Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel.” The federal government began looking into Adobe’s cancellation practices late last year.

In 2012, Adobe went from selling its creative software for lifetime use to charging users for a monthly or yearly subscription to its suite of products, including Photoshop, Illustrator, InDesign, and others. The company’s subscription model has long frustrated creatives, who are often forced to stay subscribed to Adobe in order to keep doing their jobs. Earlier this month, Adobe’s new terms of service were met with backlash after some interpreted the move as an opportunity to train its AI on users’ art.

The lawsuit speaks to continued regulatory scrutiny of Adobe. In 2022, Adobe attempted to acquire the product design platform Figma for $20 billion, but it abandoned the deal last year after facing antitrust scrutiny from European regulators.

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