US Regulators Sue Adobe Over Subscription Cancelation and Hidden Fees


The US Federal Trade Commission is suing Adobe Inc. (NASDAQ:ADBE),  accusing the Photoshop and Acrobat maker of concealing high termination fees in its subscription plan and making it difficult to cancel subscriptions.

In a case filed in a federal court in San Jose, California, the Federal Trade Commission said that Adobe (NASDAQ:ADBE) hides fees, which can reach hundreds of dollars, and other essential terms of its annual paid monthly subscription plan in fine print or behind text boxes and hyperlinks.

The cost of terminating a membership has long been a source of grievance for users of Adobe products. For individuals, accessing Adobe’s app suite can cost more than $700 per year.

In order to obtain a complete refund, subscribers must cancel their subscription within two weeks of purchase; if they don’t, they will be charged a prorated penalty. There are certain other digital services thatNASDAQ: don’t charge a cancellation fee, such Netflix Inc. (NASDAQ:NFLX) and Spotify Technology (NYSE:SPOT).

Regulators stated that company management is aware that customers frequently misunderstand the agreement. They also noted that Adobe’s (NASDAQ:ADBE) subscription pricing strategy incentivizes users to sign longer-term agreements and discourages cancellation.

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

According to the lawsuit, Adobe’s actions are in violation of a 2010 consumer protection statute that was created to safeguard internet buyers.

Amazon Inc. (NASDAQ:AMZN) was sued by the FTC last year under the same statute for allegedly misleading customers into subscribing to its Prime membership service and purposefully making the cancellation process difficult.

Featured Image – By Coolcaesar – Own work, CC BY-SA 4.0,

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