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AdobeCreatorsProductivityTech

US DOJ sues Adobe over subscription traps

Adobe is facing legal action from the US government over allegations it trapped customers in costly subscriptions by obscuring terms, fees, and implementing convoluted cancellation processes.

By
Shubham Sawarkar
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ByShubham Sawarkar
Editor-in-Chief
Shubham Sawarkar is a technology journalist at GadgetBond, covering Apple, AI, consumer technology, software, gadgets, and product launches. His work explores emerging technologies, industry developments, product...
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Jun 17, 2024, 1:22 PM EDT
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The US government has taken aim at Adobe, accusing the software giant of deceptive practices designed to lock users into expensive subscriptions. In a lawsuit filed on Monday (PDF), the Department of Justice (DOJ) alleges that Adobe has been “harming consumers by enrolling them in its default, most lucrative subscription plan without clearly disclosing important plan terms.”

The crux of the issue lies in Adobe’s annual, paid monthly subscription plan. The DOJ claims Adobe buries the details of this plan, including hefty early termination fees (ETFs) that can reach hundreds of dollars, in the fine print. This lack of transparency makes it difficult for users to understand the true cost of their subscriptions before signing up.

The DOJ further accuses Adobe of making the cancellation process an “onerous and complicated” ordeal. Unsuspecting users are forced to navigate a maze of webpages and pop-ups, only to be hit with the unexpected ETF disclosure at the very last minute. This tactic, the lawsuit argues, discourages users from canceling their subscriptions, even if they no longer need the service.

The frustration doesn’t end online. The DOJ alleges that users attempting to cancel over the phone or via live chat encounter similar roadblocks. Calls and chats are allegedly dropped or disconnected, forcing users to start from scratch and re-explain their reasons for canceling. These practices, according to the lawsuit, violate federal laws designed to protect consumers.

The lawsuit also names two high-ranking Adobe executives, Maninder Sawhney and David Wadhwani, who are alleged to have been directly involved in these practices.

“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles,” stated Samuel Levine, director of the FTC’s Bureau of Consumer Protection. He further emphasized the growing consumer frustration with companies that “hide the ball during subscription signup and then put up roadblocks when they try to cancel.”

This lawsuit is the latest development in a string of regulatory actions against Adobe. In 2012, the company shifted its business model from selling software for a one-time fee to a subscription-based model for its popular creative suite, including Photoshop, Illustrator, and InDesign. This change has long been a source of frustration for creative professionals who rely on these tools for their work and are forced into ongoing subscriptions to maintain access.

The DOJ’s lawsuit signals that Adobe’s business practices are under increasing scrutiny. In 2022, the company’s attempt to acquire Figma, a product design platform, for a staggering $20 billion was blocked by European regulators due to antitrust concerns. The current lawsuit suggests that US regulators may be following a similar path.


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