|
In
a complaint filed in the San Jose, California, federal court,
the Federal Trade Commission said Adobe buries the fees, which
sometimes reach hundreds of dollars, and other important terms
in its "annual paid monthly" subscription plan in the fine
print, or behind textboxes and hyperlinks.
According to the complaint, Adobe calculates early termination
fees as 50% of the remaining payments when consumers cancel in
their first year.
The FTC also said Adobe forces subscribers who want to cancel
online to navigate unnecessarily through numerous pages, while
those canceling by phone are often disconnected, are forced to
repeat themselves to multiple representatives, and encounter
"resistance and delay" from those representatives.
Two Adobe executives are also defendants: David Wadhwani, the
president of digital media business, and Maninder Sawhney, a
senior vice president in digital sales.
"Adobe trapped customers into year-long subscriptions through
hidden early termination fees and numerous cancellation
hurdles," said Samuel Levine, director of the FTC consumer
protection bureau. "Americans are tired of companies hiding the
ball during subscription signup and then putting up roadblocks
when they try to cancel."
Dana Rao, Adobe's general counsel and chief trust officer, said
the San Jose-based company will refute the FTC's claims in
court.
"Subscription services are convenient, flexible and cost
effective to allow users to choose the plan that best fits their
needs, timeline and budget," Rao said. "We are transparent with
the terms and conditions of our subscription agreements and have
a simple cancellation process."
Subscriptions accounted for $4.92 billion, or 95%, of Adobe's
$5.18 billion of revenue in the quarter ending March 1.
The FTC accused Adobe of violating the Restore Online Shoppers’
Confidence Act, a 2010 federal law barring merchants from
imposing charges, including for automatic subscription renewals,
unless they clearly disclose material terms and obtain
customers' informed consent.
Monday's lawsuit seeks civil penalties, an injunction against
further wrongdoing, and other remedies.
The case is U.S. v. Adobe Inc et al, U.S. District Court,
Northern District of California, No. 24-03630.
(Reporting by Jonathan Stempel in New York; Editing by Aurora
Ellis)
[© 2024 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
