The U.S. Department of Justice (DOJ) has sued Adobe, claiming the company misled consumers about its subscription plans. The DOJ alleges Adobe didn’t clearly disclose fees for canceling early, pushing people into costly subscriptions.
Allegations and complaint
According to the DOJ, Adobe strategically pushes consumers towards its APM plan without adequately informing them of the financial penalties for early termination within the first year. This lack of transparency traps users in costly subscriptions they might no longer need or want. The complaint highlights that Adobe discloses the early-termination fees only at the point of cancellation, turning these fees into a “powerful retention tool.”
“During enrollment, Adobe hides material terms of its APM plan in fine print and behind option textboxes and hyperlinks, providing disclosures that are designed to go unnoticed and that most consumers never see,” -DOJ
The government further criticizes Adobe’s cancellation process as onerous and complicated, effectively deterring customers from canceling their subscriptions.
The DOJ criticized Adobe for hiding important details in fine print during signup, which many consumers might miss. They also pointed out that canceling was made complicated, discouraging people from ending their subscriptions.
Adobe’s response
In response to the lawsuit, Adobe has vowed to fight the claims in court. Dana Rao, Adobe’s General Counsel and Chief Trust Officer, stated, “Subscription services are convenient, flexible, and cost-effective to allow users to choose the plan that best fits their needs, timeline, and budget. 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.”
Legal and financial ramifications
This case against Adobe is part of a broader trend of scrutiny against tech companies’ subscription practices. The Federal Trade Commission (FTC) launched a similar lawsuit against Amazon last year, accusing the retail giant of knowingly complicating the cancellation process for its Prime service. These legal actions highlight a growing concern about how companies manage their subscription models and the need for greater transparency and consumer protection.
Industry context
Similar to cases against other companies like Amazon, this lawsuit highlights growing concerns about how subscription services are managed and disclosed to consumers.
As this case progresses, it will likely impact how companies communicate their subscription terms and handle cancellations, aiming to protect consumers from unclear practices and ensuring they have fair choices when subscribing to services.
Featured image credit: Eray Eliaçık/Bing
