US sues Adobe for allegedly making it harder to cancel subscriptions

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The steps Adobe allegedly took to make it harder to cancel online subscriptions weren’t just annoying – they were illegal, according to the US government.

The U.S. Department of Justice and the FTC filed a lawsuit Monday against Adobe and two of its executives, alleging that they imposed a hidden early termination fee on millions of online subscribers and that Adobe forced subscribers to go through a “complex and difficult cancellation process designed to discourage the ability to cancel subscriptions they no longer wanted.” A redacted copy of the complaint can be found at this link.

Adobe announced that it will fight the lawsuit. “Subscription services are convenient, flexible and cost-effective, allowing users to choose the plan that best suits their needs, schedule and budget. Our priority is always to provide a positive experience for our customers,” Dana Rao, Adobe’s general counsel and chief trust officer, said in a statement on Monday. “We are transparent about the terms of our subscription agreements and have a simple cancellation process. We will reject the FTC’s claims in court.”

The lawsuit concerns Adobe’s online subscriptions to design and productivity software through the Adobe.com website. Also named as defendants in the lawsuit filed Monday in the U.S. District Court for the Northern District of California are David Wadhwani, Adobe’s president of digital media, and Maninder Sawhney, Adobe’s vice president of go-to-market and digital sales. In the lawsuit, the U.S. government accuses Adobe and two executives of violating the Restoring Online Shoppers’ Confidence Act (ROSCA).

According to the complaint, Adobe “systematically violated the ROSCA Act” by using fine print and “inconspicuous hyperlinks” to conceal important information about subscription plans – including information about significant early termination fees that could be charged to customers if they canceled their subscriptions. . The complaint alleges that Adobe “profited from this hidden fee for several years by misleading consumers about the true cost of the subscription and ambushing them when they tried to cancel it, using the fee as a powerful retention tool,” according to the lawsuit. government.

The complaint alleges that Adobe further violated the ROSCA Act by failing to provide consumers with a simple mechanism to cancel recurring online subscriptions. Instead, the lawsuit alleges, Adobe protected its subscription revenues by thwarting subscribers’ attempts to cancel their subscriptions by subjecting them to a “convoluted and inefficient cancellation process” filled with unnecessary steps, delays, unsolicited offers and warnings.

The lawsuit seeks unspecified money to compensate consumers allegedly affected by this activity and civil penalties against the defendants, as well as a permanent injunction barring them from engaging in future violations.

As the government notes in the lawsuit, Adobe’s subscription revenue has nearly doubled in recent years. In 2019, Adobe earned $7.71 billion in subscription revenue. By 2023, subscription revenue will account for $14.22 billion of the company’s $19.41 billion in total annual revenue.

“The Department of Justice is committed to stopping companies and their executives from preying on consumers who subscribe online by hiding key terms and making it more difficult to cancel subscriptions,” said Principal Deputy Attorney General Brian Boynton, head of the Justice Department’s Civil Division. “We will continue to enforce ROSCA against those engaging in such misconduct. No company, whether a small business or a Fortune 500 member like Adobe, is above the law.”