The US has sued Adobe over early termination fees and making subscriptions hard to cancel

The US government has sued Adobe and two senior company executives for allegedly deceiving consumers by hiding early termination fees and making them jump through hoops to cancel subscriptions to Adobe products.

The complaint filed by the Department of Justice on Monday accuses the Adobe of pushing consumers towards its “annual paid monthly” subscription plan without adequately disclosing that canceling the plan within the first year could result in an early termination fee. The complaint also alleges that Adobe’s early termination fee disclosures were buried in fine print or required consumers to hover over tiny icons to find them.

“Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a statement. “The FTC will continue working to protect Americans from these illegal business practices.”

Dana Rao, Adobe's general counsel and chief trust officer said that the company would fight the FTC in court. In a statement published on the company's website, Rao said: "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.”

The FTC said that it took action against Adobe after receiving complaints from consumers around the country who said that they were not aware of Adobe’s early termination fee. It noted that Adobe continued the practice despite being aware of consumers’ confusion. Any consumers who reached out to Adobe’s customer service to cancel their subscription encountered other obstacles like dropped calls and chats and being transferred to multiple representatives, the FTC’s statement adds.

The FTC’s action follows a wave of customer outrage over Adobe’s latest terms of service. Users were concerned that Adobe’s vague language suggested that the company could freely use their work to train its generative AI modes. In response to the backlash, Adobe announced updates to its terms of service to provide more detail around areas like AI and content ownership.

Update, June 17 2024, 1:39 PM ET: This story has been updated with a statement from Adobe.