The complaint further claims that Adobe has been profiting from this undisclosed fee for years, deceiving consumers about the actual costs of their subscriptions. To make matters worse, customers are caught off guard when they attempt to cancel, as Adobe wields this fee as a potent retention tool.
The Justice Department, in collaboration with the Federal Trade Commission (FTC), has just revealed a civil enforcement action targeting Adobe Inc. and two of its executives, Maninder Sawhney and David Wadhwani. They are being accused of violating the Restore Online Shoppers’ Confidence Act (ROSCA).
The lawsuit claims that the defendants sneakily added an undisclosed “Early Termination Fee” for numerous online subscribers. Additionally, Adobe allegedly made it difficult for subscribers to cancel their subscriptions, creating a complicated and discouraging process to prevent them from unsubscribing.
“The Justice Department is committed to stopping companies and their executives from preying on consumers who sign up for online subscriptions by hiding key terms and making cancellation an obstacle course,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to enforce ROSCA against those who engage in such misconduct. No company, whether it is a small business or a member of the Fortune 500 like Adobe, is above the law.”
Adobe Inc., a renowned software company, provides a range of design and productivity software applications through its website, Adobe.com. At the helm of Adobe's Digital Media Business is David Wadhwani, serving as the President, while Maninder Sawhney holds the position of Vice President of Digital Go to Market & Sales.
However, a recent complaint filed in the U.S. District Court for the Northern District of California sheds light on some concerning practices. It alleges that the defendants, Adobe included, have been systematically violating ROSCA (Restore Online Shoppers' Confidence Act). How? By concealing crucial information about Adobe's subscription plans using fine print and inconspicuous hyperlinks. One such hidden detail is an Early Termination Fee, which customers may face when they decide to cancel their subscriptions.
The complaint further claims that Adobe has been profiting from this undisclosed fee for years, deceiving consumers about the actual costs of their subscriptions. To make matters worse, customers are caught off guard when they attempt to cancel, as Adobe wields this fee as a potent retention tool.
“Companies that sell goods and services on the internet have a responsibility to clearly and prominently disclose material information to consumers,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “It is essential that companies meet that responsibility to ensure a healthy and fair marketplace for all participants. Those that fail to do so, and instead take advantage of consumers’ confusion and vulnerability for their own profit, will be held accountable.”
Adobe is accused of violating ROSCA by not offering an easy way for consumers to cancel their online subscriptions. Allegedly, Adobe makes it difficult for subscribers to cancel, putting them through a complicated and inefficient process with unnecessary steps, delays, and unwanted offers. The lawsuit aims to obtain compensation for consumers and financial penalties from the defendants, along with a court order to prevent future violations.
“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “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.”
Trial Attorneys Francisco L. Unger, Amber M. Charles, Zachary L. Cowan and Wesline N. Manuelpillai of the Civil Division’s Consumer Protection Branch and Assistant Director Zachary A. Dietert are handling the case, with assistance by Assistant U.S. Attorney David M. DeVito for the Northern District of California, in coordination with staff at the FTC’s Bureau of Consumer Protection.
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