Photoshop maker Adobe getting sued for hiding fees, making it difficult to cancel

The Federal Trade Commission (FTC) has filed a lawsuit against Adobe, accusing the software giant of deceptive practices related to its subscription plans. The complaint alleges that Adobe hides hefty termination fees and makes it difficult for consumers to cancel their subscriptions, particularly for the popular "annual paid monthly" plan.

The FTC claims that Adobe buries these fees, which can reach hundreds of dollars, in the fine print of its subscription agreements, often behind textboxes and hyperlinks. The complaint also alleges that Adobe calculates early termination fees as 50% of remaining payments if consumers cancel within their first year.

Furthermore, the FTC accuses Adobe of creating unnecessary hurdles for customers attempting to cancel online, forcing them to navigate multiple pages. Additionally, the FTC claims that customers attempting to cancel via phone encounter difficulties such as being disconnected, forced to repeat information to multiple representatives, and facing "resistance and delay" from these representatives.

The lawsuit names two Adobe executives, David Wadhwani and Maninder Sawhney, as defendants.

"Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles," stated Samuel Levine, director of the FTC's consumer protection bureau. "Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel."

Dana Rao, Adobe's general counsel and chief trust officer, refuted the FTC's allegations, stating that the company will defend itself in court.

"Subscription services are convenient, flexible and cost effective to allow users to choose the plan that best fits their needs, timeline and budget," Rao said. "We are transparent with the terms and conditions of our subscription agreements and have a simple cancellation process."

The FTC lawsuit alleges that Adobe's actions violate the Restore Online Shoppers’ Confidence Act, a 2010 federal law designed to protect consumers from deceptive subscription practices. The FTC seeks civil penalties, an injunction to stop further violations, and other remedies.

This lawsuit could have significant implications for Adobe, which generates a substantial portion of its revenue from subscriptions. The outcome will determine whether Adobe's practices meet the standards set by the Restore Online Shoppers’ Confidence Act and could influence the future of subscription services in the technology industry.