The Federal Trade Commission has sued Adobe and two executives for allegedly deceiving consumers through hidden fees and difficult cancellation processes.
The software maker said it will contest the FTC’s claims in court.
Dana Rao, Adobe’s general counsel and chief trust officer, said: “Our priority is to always ensure our customers have a positive experience.
“We are transparent with the terms and conditions of our subscription agreements and have a simple cancellation process.”
The FTC accuses Adobe and its executives, Maninder Sawhney and David Wadhwani, of concealing an early termination fee for its most popular subscription plan.
It accuses the company of making it challenging for consumers to cancel their subscriptions.
Wadhwani is the president of Adobe’s digital media business, and Sawhney is an Adobe vice president.
The Department of Justice, acting on a referral from the FTC, filed a federal court complaint.
The agency claims Adobe pushed consumers toward an annual paid monthly subscription.
“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles”
This was without adequately disclosing canceling within the first year could incur fees amounting to hundreds of dollars.
Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said: “Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles.”
The complaint details how Adobe’s website preselects the annual paid monthly option for consumers purchasing a subscription.
The plan’s monthly cost is prominently displayed during enrollment.
However, the early termination fee and its amount—50 percent of the remaining monthly payments for cancellations within the first year—are buried in fine print.
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Adobe’s website reveals the “annual plan, paid monthly” is the default subscription option, alongside an “annual plan, prepaid” option.
A note below these options mentions, “Fee applies if you cancel after 14 days.”
There is an information button that elaborates: “If you cancel after 14 days, your service will continue until the end of that month’s billing period, and you will be charged an early termination fee.”
However, the specific fee amount has not been disclosed.
Consumers filed complaints with the FTC and the Better Business Bureau regarding the hidden early termination fees.
