Observed Signal · Jun 18, 2024 · Regulation · Source: Trending Topics · Impact: 3/5 · Sentiment: Negative
US FTC sues Adobe over hidden subscription cancellation fees
The US Federal Trade Commission (FTC) has filed a lawsuit against software giant Adobe, accusing it of violating consumer protection laws through hidden early-termination fees and a deliberately complicated cancellation process for subscriptions to products such as Photoshop and Illustrator. The complaint alleges Adobe failed to clearly disclose the one-year contract commitment and early-cancellation fees, which can reach several hundred dollars, and forced customers through a convoluted cancellation flow requiring password re-entry and multiple pop-ups. Adobe's General Counsel Dana Rao denied the allegations, stating the company is transparent about its subscription terms and will defend itself in court. Samuel Levine, Director of the FTC Bureau of Consumer Protection, stated that Adobe lured customers into annual subscriptions through hidden fees and numerous hurdles. Adobe has operated a subscription-based distribution model since around 2012.
Major FTC legal action against a leading technology and MarTech vendor could establish regulatory precedent for SaaS subscription disclosure and cancellation practices used across the broader advertising and marketing technology ecosystem.
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Key Takeaways & Evidence Grounding
- US FTC filed a consumer protection lawsuit against Adobe over its subscription practices.
- FTC alleges Adobe imposed hidden early-termination fees and made cancellation unnecessarily difficult.
- Adobe's signup process allegedly failed to disclose the one-year commitment and early-cancellation fees of up to several hundred dollars.
- Adobe General Counsel Dana Rao denied the allegations and said the company will defend itself in court.
- Adobe switched to a subscription-based distribution model around 2012.
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1 Entity mapped“Adobe, founded in 1982, is known for photo and PDF editing software and is being sued by the FTC over subscription cancellation fees and dis...”
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