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The United States is suing Adobe, the maker of Photoshop

The United States is suing Adobe, the maker of Photoshop

The US government sued Adobe, maker of Photoshop and Acrobat, on Monday. The San Jose, California-based US software company and two of its executives are accusing it of hiding high cancellation fees for a popular subscription plan and harming consumers by making it harder to cancel subscriptions.


In a lawsuit (Case No. 5:24-cv-03630) filed by the US Department of Justice in response to a US Federal Trade Commission (FTC) notice in the US Federal Court for the Northern District of California in San Jose, Adobe and two executives, David Wadwani, President of Digital Media and Digital Sales Senior Vice President Maninder Sawhney accused them of luring consumers into one-year subscriptions with “hidden prepayment penalties and multiple cancellation bans”. But consumers are not adequately informed that canceling a subscription can cost them hundreds of dollars in the first year. The Supervising Officer's report says.

Adobe has primarily moved to a subscription model since 2012, requiring consumers to pay for software access on an ongoing basis. Such subscriptions account for a large portion of the company's revenue.

According to the complaint, if a customer cancels in the first year, Adobe charges a prepayment penalty of 50 percent of the remaining fees. In turn, the fees and other important terms and conditions for the “monthly subscription paid annually” are hidden behind small print or text boxes and hyperlinks on the company's website. Therefore, many consumers don't know that a “pay-as-you-go” plan requires continuing the subscription for a year. Even though Adobe was aware of consumers' problems with its subscription plan, the company continued its practice, the FTC complaint alleges.

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Adobe's termination process is designed to make it more difficult for consumers to terminate. U.S. According to the trade regulator, Adobe forces subscribers who want to cancel online to unnecessarily click through multiple pages, while subscribers who cancel over the phone face “resistance and delays from Adobe staff.”

“Americans are tired of companies that pass the ball to them when they sign contracts, then stand in their way when they try to cancel. The FTC will continue to work to protect Americans from these illegal business practices,” he said. The FTC's Bureau of Consumer Protection said in a report to the regulator.


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