U.S. Government Sues Adobe Over Subscription Cancellation Process

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A major legal news, the United States Department of Justice (DOJ), with the Federal Trade Commission (FTC), has filed a civil enforcement action against Adobe Inc. and two of its executives, David Wadhwani and Maninder Sawhney, for alleged violations of the Restore Online Shoppers’ Confidence Act (ROSCA). The lawsuit accuses Adobe of deceptive practices restricting consumers’ ability to cancel subscriptions by forcing subscribers through a complex cancellation process, leading to widespread frustration and financial charges.

The complaint, lodged in the US District Court for the Northern District of California, claims that Adobe imposed undisclosed “Early Termination Fees” on millions of subscribers and made the cancellation process deliberately complex. Adobe’s subscription model, which shifted in 2012 from one-time software purchases to monthly or yearly plans, is the heart of the controversy. Consumers reportedly felt trapped in year-long subscriptions without clear disclosures about cancellation fees, hidden behind fine print and hyperlinks.

The DOJ and FTC argue that Adobe’s practices disobeyed ROSCA by failing to provide a simple cancellation system and unwillingly using the early termination fees to retain subscribers. The complaint seeks consumer redress, monetary civil penalties, and a permanent injunction against future violations.

Principal Deputy Assistant Attorney General (AG) Brian M. Boynton emphasized that the Justice Department is committed to protecting consumers from misleading subscription practices. US Attorney Ismail J. Ramsey and FTC Director Samuel Levine quoted these beliefs, stressing the need for transparency and accountability in online subscriptions, allowing the audience to demand these standards in their online transactions.

Adobe, however, denies these allegations. Dana Rao, Adobe’s general counsel, stated that the company maintains transparent subscription terms and a straightforward cancellation process, testifying to contest the FTC’s claims in court.

This lawsuit is part of broader regulatory scrutiny of big tech companies, building on past actions against industry giants like Amazon and ongoing efforts to ensure consumer protection in the digital marketplace.

Key Takeaways:

  • The DOJ and FTC have sued Adobe for allegedly deceptive subscription practices.
  • The lawsuit claims Adobe imposed hidden early termination fees and made cancellations difficult.
  • Adobe denies the allegations, maintaining that it offers transparent and easy-to-cancel subscriptions.
  • This legal action is part of a wider regulatory crackdown on Big Tech’s consumer practices.

Source: https://www.justice.gov/opa/pr/united-states-files-complaint-against-adobe-and-two-adobe-executives-alleged-violations

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