U.S. DOJ Sues Adobe for Consumer Harm

The U.S. Department of Justice (DOJ) launched a federal lawsuit against Adobe today, accusing the firm of harming consumers with deceptive business practices. The case was referred to the DOJ by the U.S. Federal Trade Commission (FTC).

“For years, Adobe has harmed consumers by enrolling them in its default, most lucrative subscription plan without clearly disclosing important plan terms,” the complaint alleges. “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. Adobe clearly discloses the ETF only when subscribers attempt to cancel, turning the stealth ETF into a powerful retention tool that by trapping consumers in subscriptions they no longer want.”

Well, this is unfortunate timing: I literally just signed up for Adobe’s Photography plan as part of my ongoing look at AI subscription services, and I chose the $19.99 per month option with monthly billing specifically to avoid ongoing charges over a year. (Or a big upfront fee.) In fact, I was surprised that the monthly and annual charges worked out to the same amount, as that isn’t the case with the more expensive Photoshop plan I had first considered.

On that note, I can confirm what the DOJ alleges here: Adobe does hide material terms of its APM plan in fine print and behind optional text boxes and hyperlinks during enrollment. Those disclosures, the DOJ notes, are designed to go unnoticed, and most consumers will never see them. “Adobe then deters cancellations by employing an onerous and complicated cancellation process,” it notes, giving me a glimpse of my future. “As part of this convoluted process, Adobe ambushes subscribers with the previously obscured ETF when they attempt to cancel. Through these practices, Adobe has violated federal laws designed to protect consumers.”

More specifically, the DOJ says that Adobe’s business practices violate various statutes of the Federal Trade Commission Act and the Restore Online Shoppers’ Confidence Act. It seeks “injunctive relief, civil penalties, equitable monetary relief, as well as other relief.” The complaint also specifically calls out Adobe president David Wadhwani for “formulating, directing, controlling, having the authority to control, or participating in the acts and practices” it describes. Yikes.