The Federal Trade Commission (FTC) filed a federal court complaint against Adobe and two of its executives. The complaint alleges violations of the Restore Online Shoppers’ Confidence Act.
These accusations stem from Adobe’s “annual paid monthly” subscription plan. The FTC argues Adobe traps customers with hidden fees and a difficult cancellation process.
“Adobe trapped customers into year-long subscriptions through hidden early termination fees and many cancellation hurdles,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel. The FTC will continue working to protect Americans from these illegal business practices.”
Adobe switched from a direct sale model to a subscription-based licensing plan in 2012. It pushed customers to subscribe to its software with monthly or annual fees.
The subscription model saves customers money over purchasing, yet cancelling has proven difficult.
Cancelling a subscription before completing an entire year results in an early termination fee (ETF). The fee Adobe charges is 50% of the remaining annual amount. The FTC argues the ETF isn’t made clear to subscribers.
Not Adobe’s Only Problem
This complaint is not Adobe’s only challenge. Adobe’s policy for leveraging user projects to train its AI model drew ire among its creative customer base.
Last week, Adobe announced a change to these updated terms in response to the backlash.