Adobe, the developer of the well-known Photoshop and Creative Cloud software, is being taken to court by the United States Federal Trade Commission (FTC) consumer watchdog which is alleging the Californian company is deceiving consumers with its subscription charges.
The FTC, which is suing not just Adobe but two company executives as well, vice president Maninder Sawhney and president David Wadhwani, said the software maker is hiding the early termination fee for its most popular subscription plan. Furthermore, Adobe is making it difficult for consumers to cancel their subscriptions as well.
What Adobe does, the FTC alleges, is to steer people towards the annual paid monthly subscription plan. This is pre-selected by default, and displays the monthly cost for the plan as part of the subscription enrolment process.
Key conditions such as Adobe charging a 50% early termination fee if a customer cancels the subscription in the first year are not clearly disclosed however.
The remaining payment could amount to hundreds of dollars, the FTC said. A subscription to Creative Cloud costs US$659.88 a year, or NZ$1075.55.
The FTC also said the information on the early termination fee is buried in fine print that requires people to hover over small icons to find.
The consumer watchdog also said in its complaint that Adobe is aware of the consumer confusion around the terms of its subscription transactions.
Adobe and the two executives in charge of the company's digital media business are alleged to have violated the US ROSCA (Restore Online Shoppers' Confidence Act) and the FTC Act by not disclosing the terms of the subscription model clearly.
On top of taking legal action against Adobe, the FTC is also advising users who want to try out software to check what others online are saying, and to study the terms and conditions of "free trial software".
Users can also dispute unexpected charges with their credit card issuers, the FTC suggested.
Adobe has issued a brief statement on the FTC court case, denying all the allegations.
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.” - Dana Rao, general counsel and chief trust officer
News of the court case comes soon after furore over Adobe updating its terms and conditions, leading users to think the company was granting itself the rights to use content created by subscribers to train AI.
Adobe has since come out with a clarification on the matter, saying it will not train generative AI on customer content, and that users remain the owners of their own content.
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