Adobe Faces Lawsuit from U.S. Government for Difficult-to-Cancel Subscriptions

U.S. regulators have taken legal action against software giant Adobe, alleging that the company made it difficult for consumers to cancel subscriptions to popular products like Photoshop. The Justice Department filed a lawsuit in the U.S. District Court for the Northern District of California, accusing Adobe of hiding details of a costly cancellation fee in fine print and making the cancellation process challenging for customers.

This move by regulators is part of a broader crackdown on companies that make it hard for consumers to terminate subscriptions. Last year, the Federal Trade Commission (FTC) sued Amazon over similar claims, leading to proposed new rules that would require companies to offer an easy way to cancel subscriptions.

The lawsuit against Adobe comes amidst increased scrutiny of Big Tech companies by federal regulators. The Justice Department and the FTC have filed antitrust lawsuits against major tech firms like Google, Amazon, Apple, Microsoft, and Meta. Adobe itself faced regulatory pushback last year when it dropped a planned acquisition of design startup Figma.

In response to the lawsuit, Adobe’s general counsel, Dana Rao, stated that the company is transparent about its subscription terms and will challenge the FTC’s claims in court. The lawsuit names David Wadhwani, president of Adobe’s digital media business, and Maninder Sawhney, a company vice president, as defendants.

The government’s investigation into Adobe’s practices revealed that the company earned billions in revenue from subscriptions and allegedly made it difficult for customers to cancel. The lawsuit claims that Adobe displayed the overall price of subscriptions prominently but buried details of a cancellation fee in lighter text. Customers who tried to cancel reportedly faced challenges on the company’s website and customer service line.

Overall, the lawsuit against Adobe highlights the ongoing efforts by regulators to hold companies accountable for their subscription practices and ensure transparency for consumers. Adobe’s executives named in the lawsuit, including Mr. Wadhwani, are key figures in the company’s subscription business.