The measures that Adobe allegedly took to make it difficult to cancel online subscriptions were not only annoying, but also illegal, according to the US government.
The U.S. Department of Justice and the FTC filed a lawsuit against Adobe and two of its executives on Monday, alleging that they imposed a hidden early termination fee on millions of online subscribers and that Adobe forced subscribers to navigate “a complex and challenging cancellation process designed to discourage them from canceling subscriptions they no longer wanted.” A redacted copy of the complaint is located at this link.
Adobe said it will fight the lawsuit. “Subscription services are convenient, flexible and cost-effective, allowing users to choose the subscription that best suits their needs, timeline and budget. Our priority is to always ensure our customers have a positive experience,” Dana Rao, general counsel and chief trust officer of Adobe, said in a statement Monday. “We are transparent about the terms of our subscription agreements and have a simple cancellation process. We will refute the FTC’s claims in court.”
The lawsuit concerns Adobe’s online subscriptions for design and productivity software applications through its website, adobe.com. The lawsuit, filed Monday in the U.S. District Court for the Northern District of California, also names David Wadhwani, Adobe’s president of digital media, and Maninder Sawhney, Adobe’s senior vice president of digital go-to-market and sales. The US government lawsuit accuses Adobe and the two executives of violating the Restore Online Shoppers’ Confidence Act (ROSCA).
According to the complaint, Adobe has “systematically violated ROSCA” by using small print and “unobtrusive hyperlinks” to conceal important information about its subscriptions – including information about significant early termination fees that customers may be charged when they cancel their subscriptions. The complaint alleges that for several years Adobe has “taken advantage of these hidden fees, misleading consumers about the true cost of a subscription and hitting them with the fees when they try to cancel, using the fees as a powerful retention tool.” used,” the complaint states. government lawsuit.
The complaint alleges that Adobe further violated ROSCA by failing to provide consumers with an easy mechanism to cancel recurring, online subscriptions. Instead, the lawsuit alleges, Adobe protected its subscription revenue by thwarting subscribers’ attempts to cancel, subjecting them to a “complicated and inefficient cancellation process” full of unnecessary steps, delays, unsolicited offers and warnings.
The lawsuit seeks unspecified money to compensate consumers allegedly affected by the activity and civil penalties for the defendants, as well as a permanent injunction barring them from committing future violations.
As the government’s lawsuit shows, Adobe’s subscription revenue has nearly doubled in recent years. In 2019, Adobe earned $7.71 billion in subscription revenue. In 2023, subscription-based revenues accounted for $14.22 billion of the company’s total annual revenues of $19.41 billion.
“The Department of Justice wants to prevent companies and their executives from targeting consumers who sign up for online subscriptions by hiding key terms and turning cancellation into an obstacle course,” said Deputy Assistant Attorney General Brian Boynton, chief of the Civil Division. from the DOJ. “We will continue to enforce ROSCA against those who engage in such misconduct. No company, whether small or a member of the Fortune 500 like Adobe, is above the law.”
