The US Department of Justice (DOJ) has filed a lawsuit against Adobe, alleging that the company has been misleading consumers by obscuring early-termination fees and complicating canceling subscriptions.
The complaint, filed on Monday, claims that Adobe enrolls consumers in its most profitable subscription plan without adequately disclosing the key terms.
According to the DOJ, Adobe pushes consumers towards the “annual paid monthly” (APM) subscription plan without adequately informing them that canceling within the first year can result in substantial fees, costing exponentially more.
The complaint states that Adobe only reveals these fees when subscribers attempt to cancel, using them as a retention strategy to lock consumers into subscriptions they no longer want.
The DOJ’s complaint highlights how Adobe conceals critical terms of the APM plan in fine print and behind obscure textboxes and hyperlinks, making it easy for customers to miss this crucial information.
Additionally, Adobe’s cumbersome cancellation process is designed to discourage customers from ending their subscriptions.
Adobe has denied these allegations and plans to defend itself in court. Dana Rao, Adobe’s General Counsel and Chief Trust Officer, stated that subscription services are meant to be convenient, flexible, and cost-effective, allowing users to select plans that best fit their needs.
Rao emphasized that Adobe aims to ensure a positive customer experience, claiming the company is transparent about subscription terms and offers a simple cancellation process.
The DOJ argues that Adobe’s practices violate federal consumer protection laws and is seeking various forms of relief, including injunctions, civil penalties, and monetary compensation.
Adobe shifted to a subscription-based model in 2012, moving away from its previous one-time purchase model. This change has made subscription revenue a vital part of the company’s business strategy.
The Federal Trade Commission (FTC) has noted this trend and has pursued similar actions, such as a lawsuit against Amazon last year for allegedly making it difficult for customers to cancel their Prime memberships.
This lawsuit against Adobe underscores the growing scrutiny of subscription-based business models and companies’ tactics to retain customers. The outcome of this case could have significant implications for Adobe and other companies that use similar subscription strategies.
