On June 17, 2024, the Federal Trade Commission of the United States government decided to take sweeping legal action against Adobe and two of its executives in the form of a federal lawsuit. The two executives named specifically are Maninder Sawhney and David Wadhwani, Adobe's Vice President of Digital Go to Market and Sales and Senior Vice President. According to the FTC, Adobe “harmed consumers by enrolling them in its default, most lucrative subscription plan without clearly disclosing important plan terms.” This is pulled directly from the lawsuit:
“Adobe fails to adequately disclose to consumers that by signing up for the “Annual, Paid Monthly” subscription plan (“APM plan”), they are agreeing to a year-long commitment and a hefty early termination fee (“ETF”) that can amount to hundreds of dollars. Adobe clearly discloses the ETF only when subscribers attempt to cancel, turning the stealth ETF into a powerful retention tool that [REDACTED] by trapping consumers in subscriptions they no longer want.”
The FTC alleged that all of this information is intentionally hidden from the consumer at the time of enrollment.
Why is this so important for consumers? Anyone who has dealt with the endless number of predatory subscription services that seem to plague the modern commercial world will understand the importance of this lawsuit. If Adobe is found guilty of these anti-consumer practices, this landmark case could potentially set a new standard that benefits the consumer, legally preventing companies like Adobe from allegedly engaging in similar subscription-based anti-consumer practices in the future.
Sources:
CNBC. (2024, June 17). U.S. sues Adobe Over Subscription Plan Disclosures. CNBC. https://www.cnbc.com/2024/06/17/us-sues-adobe-over-subscription-plan-disclosures.html
FTC. Complaint for permanent injunction, monetary judgment, ... https://www.ftc.gov/system/files/ftc_gov/pdf/adobe_complaint.pdf
US sues Photoshop Maker Adobe for hiding fees, making it difficult to cancel | Reuters. https://www.reuters.com/technology/us-sues-adobe-over-subscription-plan-disclosures-2024-06-17/
Liu, H., & Staff in the Office of Technology. (2024, June 17). FTC takes action against Adobe and executives for hiding fees, preventing consumers from easily cancelling software subscriptions. Federal Trade Commission. https://www.ftc.gov/news-events/news/press-releases/2024/06/ftc-takes-action-against-adobe-executives-hiding-fees-preventing-consumers-easily-cancelling
United States files complaint against Adobe and two Adobe executives for alleged violations of Restore Online Shoppers’ Confidence act. Office of Public Affairs | United States Files Complaint Against Adobe and Two Adobe Executives for Alleged Violations of Restore Online Shoppers’ Confidence Act | United States Department of Justice. (2024, June 17). https://www.justice.gov/opa/pr/united-states-files-complaint-against-adobe-and-two-adobe-executives-alleged-violations
Restore Online Shoppers' Confidence Act https://www.ftc.gov/legal-library/browse/statutes/restore-online-shoppers-confidence-act
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