US Sues Adobe Over Subscriptions, Alleges Customers 'Harmed'

The U.S. Federal Trade Commission has taken action against Adobe, alleging the software maker's subscription plans have "harmed" consumers, according to the court complaint filed by the Department of Justice Monday upon the FTC's referral.  

"For years, Adobe has harmed consumers by enrolling them in its default, most lucrative subscription plan without clearly disclosing important plan terms. 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," the complaint reads. 

The FTC alleges that Adobe only discloses termination fees when customers attempt to cancel their subscriptions. 

The complaint further alleges that Adobe deliberately makes the cancellation process difficult for customers to navigate.  

The lawsuit follows backlash Adobe received after recently updating its terms of use for Photoshop and Substance 3D users requiring those customers agreeing to allow Adobe to access their content "through both automated and manual methods," Computing reported. 

The move suggests to some that Adobe is looking for user content to train its artificial intelligence models.  

Users expressed their outrage over the updated terms across social media to the point where Adobe issued this statement on X: 

Two Adobe executives are also named as defendants in the lawsuit -- Maninder Sawhney, who is currently SVP of digital media and digital GTM (Go to Market) and sales -- and David Wadhwani, who is the chief business officer of digital media, according to their LinkedIn profiles.  

"Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles," Samuel Levine, director of the FTC's bureau of consumer protection, said in a news release. "Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel. The FTC will continue working to protect Americans from these illegal business practices," his statement continued.  

Adobe directed MES Computing to a statement on its website regarding the lawsuit: 

"Subscription services are convenient, flexible and cost effective to allow users to choose the plan that best fits their needs, timeline and budget. Our priority is to always ensure our customers have a positive experience. We are transparent with the terms and conditions of our subscription agreements and have a simple cancellation process. We will refute the FTC's claims in court," said Dana Rao, Adobe's general counsel and chief trust officer, in the statement.