In a significant legal move, the Federal Trade Commission (FTC) has filed a lawsuit against Adobe, accusing the software giant of deceptive practices involving hidden fees and a confusing cancellation process. This lawsuit targets Adobe's Creative Cloud services, which encompass popular software products such as Photoshop, Illustrator, and Acrobat Reader.
The FTC's complaint alleges that Adobe has been misleading consumers by hiding critical terms of its annual, paid monthly plan in obscure fine print and behind optional text boxes and hyperlinks. This practice has reportedly led to many users being unaware of substantial early termination fees that can reach hundreds of dollars when attempting to cancel their subscriptions.
Customer Frustrations
In recent weeks, Adobe has faced mounting criticism from its user base. Customers have expressed outrage over changes in the Software Terms of Service, which appeared to grant Adobe the right to access any work stored on its servers. This led to a wave of cancellations and a surge of social media backlash from the creative community.
The FTC's investigation, which began last year, highlights numerous instances where customers attempting to cancel their subscriptions encountered significant obstacles. These included being passed around between non-native English-speaking support staff, experiencing dropped calls, and continuing to be billed despite believing they had successfully canceled their subscriptions.
Adobe's Defense
Adobe has vowed to contest the lawsuit. Dana Rao, Adobe's general counsel and chief trust officer, defended the company's practices, stating, "We are transparent with the terms and conditions of our subscription agreements and have a simple cancellation process." Adobe's shift to a subscription-based model in 2012 has been a point of contention, with many users discontented with the recurring fees.
Inside the Lawsuit
While parts of the lawsuit remain redacted, it accuses Adobe of intentionally complicating the cancellation process. The FTC's complaint describes a convoluted procedure where critical details about the early termination fee are buried in fine print or hidden behind tiny icons on Adobe's website. The lawsuit alleges that this obfuscation is a deliberate attempt to prevent customers from canceling their subscriptions.
FTC's Bureau of Consumer Protection Director, Samuel Levine, stated, "Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles. Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel."
Implications for Users
For now, Adobe users will need to wait as the lawsuit progresses. The company's current subscription terms, cancellation policies, and refund procedures remain unchanged. Users attempting to cancel may still face fees, as evidenced by a recent check which indicated a cancellation fee of $143.96 for one user.
Broader Controversies
The legal troubles come on the heels of Adobe's recent changes to its terms of service, which had granted the company extensive access to user projects stored on its cloud servers. These changes sparked significant backlash, as users felt their privacy and intellectual property were at risk. Adobe clarified that these terms were meant for content moderation and the removal of illegal content, particularly in the context of generative AI technologies.
FTC's Allegations Under ROSCA
The lawsuit also accuses Adobe of violating the Restore Online Shoppers' Confidence Act (ROSCA), which protects consumers from recurring charges without explicit consent. The FTC contends that Adobe's promotion of a "yearly billed monthly" plan, while hiding substantial early termination fees, constitutes a breach of this act. The FTC argues that the plan's true costs are obscured, leading customers to face unexpected fees when they try to cancel.
Furthermore, the lawsuit implicates two Adobe executives, Maninder Sawhney and David Wadhwani, suggesting they were aware of customer frustrations regarding the early termination fees but continued to support practices that obscured these fees.
As this legal battle unfolds, Adobe users and industry observers alike will be watching closely to see how the company responds and whether this will lead to changes in its business practices.
