Adobe, the maker of popular software like Photoshop, Illustrator, and the rest of the Creative Cloud apps, has found itself on the receiving end of a lawsuit filed by the United States Federal Trade Commission.
The FTC claims that Adobe, as well as two of its executives, are "deceiving consumers by hiding the early termination fee for its most popular subscription plan and making it difficult for consumers to cancel their subscriptions."
The company, Maninder Sawhney, and David Wadhwani will now have to deal with a Department of Justice suit over claims that Adobe enticed customers towards choosing the "'annual paid monthly subscription without adequately disclosing that canceling the plan in the first year could cost hundreds of dollars."
"Deceiving customers"
In a press release shared on the FTC website, the commission noted that Adobe's 2012 shift to a subscription model means that recurring payments now account for most of the company's revenue. It alleged that Adobe pushes customers towards the "annual paid monthly" subscription plan and even chooses that as default. But the real issue is the early termination fee.
"Adobe prominently shows the plan’s 'monthly' cost during enrollment, but it buries the early termination fee (ETF) and its amount, which is 50 percent of the remaining monthly payments when a consumer cancels in their first year," the press release notes. "Adobe’s ETF disclosures are buried on the company’s website in small print or require consumers to hover over small icons to find the disclosures." The FTC also points out that users who reach out to Adobe to cancel their subscriptions are often met with obstacles including multiple transfers and "dropped chats."
