Is Adobe Inc. ethical?

In a June 2024 complaint, the Justice Department and Federal Trade Commission accused Adobe of burying termination fees that could reach hundreds of dollars in the fine print for its "annual paid monthly" subscription plan, or behind textboxes and hyperlinks.

Adobe to pay $75 million to resolve lawsuit

To some users, the vague wording seemed to be saying that Adobe would now have unfettered access to their projects, including ones subject to non-disclosure agreements, and could use them to train artificial intelligence models.

The Federal Trade Commission (FTC) said Monday that Adobe deceives customers by "hiding" the early termination fee for the company's services, which includes popular tools such as Acrobat, Photoshop and Illustrator.

Adobe Recalls High-Powered Magnets Distributed with Promotional Materials Package (Recall Alert)

Adobe Recalls High-Powered Magnets Distributed with Promotional Materials Package (Recall Alert)

The case has now been settled, with Adobe agreeing to a $75 million fine and matching free services to users of its products.

Core to the government’s complaint was Adobe’s practice of hiding cancellation fees for its subscriptions in the fine print or behind hyperlinks.

Adobe charges 50 percent of the remaining subscription term when you cancel, which can be hundreds of dollars on annual plans.

Adobe settles DOJ cancellation fee lawsuit, will pay $75 million penalty - Ars Technica

Adobe accused by US government of 'trapping subscribers'

Adobe spent the first half of June addressing user fury around its terms of use. Before the controversy fully settled, the company is facing another significant challenge: a lawsuit from US regulators.

On Monday, the Department of Justice sued, saying Adobe violated consumer protection laws by hiding expensive fees and making it difficult to cancel subscriptions.

Adobe Is Having a Tough Month With New DOJ Lawsuit, Customer Boycotts - Business Insider

government is suing Adobe, accusing the software maker of steering customers toward a pricey subscription plan while concealing how much it costs to cancel the service.

The FTC alleges that Adobe's practices violate the Restore Online Shoppers' Confidence Act by failing to disclose the cancellation fee prominently enough at signup, not getting informed consent from a customer about those fees and by not offering customers a simple cancellation process.

— A California federal court partially denied Adobe’s motion to dismiss class claims brought by consumers who say the company uses unfair and unlawful tactics in how they manage the terms and conditions for its software offerings, such as making it needlessly difficult to cancel a subscription.

Regulators alleged that Adobe hid early termination fees and created complicated cancellation processes, violating the Restore Online Shoppers’ Confidence Act (ROSCA), which requires companies to clearly disclose subscription terms and provide straightforward cancellation options.

Adobe has agreed to a $150 million settlement to resolve a U.S. government lawsuit that accused the company of making its subscriptions unnecessarily difficult to cancel.

Adobe to offer users free services $75 million over hard-to-cancel subscription mess - Digital Trends

“For years, Adobe has harmed consumers by enrolling them in its default, most lucrative subscription plan without clearly disclosing important plan terms,” the suit says.

The Justice Department filed suit against Adobe, arguing its sign-up process purposefully tricks consumers into subscriptions that are hard to cancel.

In the case of Adobe, the Justice Department alleges the company is using the tactic to manipulate users into signing up for expensive subscriptions—that are also designed to be hard to break.

PRESS RELEASE: FTC Takes Action Against Adobe and Executives for Hiding Fees, Preventing Consumers from Easily Cancelling Software Subscriptions

The Federal Trade Commission is taking action against software maker Adobe and two of its executives, Maninder Sawhney and David Wadhwani, for deceiving consumers by hiding the early termination fee for its most popular subscription plan and making it difficult for consumers to cancel their subscriptions.

PRESS RELEASE: FTC Takes Action Against Adobe and Executives for Hiding Fees, Preventing Consumers from Easily Cancelling Software Subscriptions

FTC Takes Action Against Adobe and Executives for Hiding Fees, Preventing Consumers from Easily Cancelling Software Subscriptions | Federal Trade Commission

Adobe and its executives were aware of significant government and regulatory scrutiny into its subscription enrollment and cancellation practices, including a Civil Investigative Demand the FTC issued to Adobe in June 2022 probing potential violations of ROSCA related to Adobe’s APM plan disclosures and cancellation mechanisms.

Adobe frequently pre -selects the APM plan as a default selection in subscription enrollment flows.

Adobe’s misconduct does not stop with concealing key APM plan terms to maximize profits.

As a senior executive in the Digital Media Business unit, Wadhwani has participated in and helped to direct Adobe’s ETF and APM plan enrollment flow practices.

Adobe’s enrollment flows fail to clearly and conspicuously disclose material terms of the APM plan, including (1) that the length of the subscription term is one year, (2) that cancellation before the end of the first year is subject to an ETF, and (3) the amount of the ETF.

To put an end to Adobe’s unlawful conduct, the United States brings this lawsuit, seeking injunctive relief, civil penalties, equitable monetary relief, as well as other relief.

In numerous instances, in connection with charging consumers for goods or services sold in transactions effected on the Internet through a negative option feature, as described above, Adobe has failed to provide simple mechanisms for a consumer to stop recurring charges for the good or service to the consumer’s credit card, debit card, bank account, or other financial account.

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.

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’s practices as set f orth are violations of ROSCA, 15 U.S.C. § 8403(3), and thus violations of Section 18 of the FTC Act, 15 U.S.C. § 57a, 15 U.S.C. § 8404(a), and therefore constitute unfair or deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C.

Most Adobe customers have the option to self-cancel their subscriptions online.

During enrollment, Adobe hides material terms of its APM plan in fine print and behind optional textboxes and hyperlinks, providing disclosures that are designed to go unnoticed and that most consumers never see.

District Court for the Northern District of California, the defendants have systematically violated ROSCA by using fine print and inconspicuous hyperlinks to hide important information about Adobe’s subscription plans, including about a hefty Early Termination Fee that customers may be charged when they cancel their subscriptions.

The complaint alleges that for years, Adobe has profited from this hidden fee, misleading consumers about the true costs of a subscription and ambushing them with the fee when they try to cancel, wielding the fee as a powerful retention tool.

Office of Public Affairs | United States Files Complaint Against Adobe and Two Adobe Executives for Alleged Violations of Restore Online Shoppers’ Confidence Act | United States Department of Justice

District Court for the Northern District of California, the government alleged that Adobe violated ROSCA by using fine print and inconspicuous hyperlinks to hide important information about Adobe’s subscription plans, including information about a hefty Early Termination Fee that customers may be charged when they cancel their subscriptions.

For any free trial lasting longer than seven days, Adobe must also remind customers before converting them into a paid subscription with an Early Termination Fee.

District Court for the Northern District of California, the government alleged that Adobe violated ROSCA by using fine print and inconspicuous hyperlinks to hide important information about Adobe’s subscription plans, including information about a hefty Early Termination Fee that customers may be charged when they cancel their subscriptions.

Adobe will be required to clearly disclose any Early Termination Fee and how the fee is calculated before enrolling customers in subscriptions.

Furthermore, Adobe will be required to provide its subscribers with easy ways to cancel their subscriptions.

The complaint alleges that for years, Adobe has profited from this hidden fee, misleading consumers about the true costs of a subscription and ambushing them with the fee when they try to cancel, wielding the fee as a powerful retention tool.

District Court for the Northern District of California, the defendants have systematically violated ROSCA by using fine print and inconspicuous hyperlinks to hide important information about Adobe’s subscription plans, including about a hefty Early Termination Fee that customers may be charged when they cancel their subscriptions.

The complaint alleges that Adobe has further violated ROSCA by failing to provide consumers with a simple mechanism to cancel their recurring, online subscriptions.

Under the agreement, Adobe must clearly and conspicuously disclose recurring charges and cancellation fees before accepting consumers’ billing information.

Consumers who went to Adobe’s customer service to cancel encountered “resistance and delay from Adobe representatives,” and many were “subjected to a time consuming and burdensome process,” the lawsuit said.

San Jose’s Adobe, accused of dirty subscription tricks, agrees to pay $75 million fine, and give $75 million in free services to customers – The Mercury News

In context: The US government has sued Adobe over allegations that it deceived consumers by hiding early termination fees and purposely making product subscriptions difficult to cancel.

District Court for the Southern District of New York (the “Securities Action”) naming Adobe and certain of our current and former officers as defendants.

This Settlement Agreement (“Agreem ent”) is entered into among the United States of America, acting through the United States Department of Justice and on behalf of the U.S. General Services Administration (“GSA”) (collectively the “United States”), Adobe Inc. (“Adobe”), and Alan Dowless, Barbara Evans, and Carrie Whalen (collectively, “Relators”) (hereafter collectively referred to as “the Parties”), through their authorized representatives.

The Justice Department was awarded $3 million from software giant Adobe, as part of a False Claims Act settlement.

Adobe Inc. has agreed to pay $3 million to resolve False Claims Act allegations that it made payments in violation of the Anti-Kickback Act in return for influence over the sale of Adobe software to the federal government.

Adobe Inc. Agrees to Pay $3 Million to Settle Kickback Allegations Involving Federal Software Sales Adobe Inc. has agreed to pay $3 million to resolve False Claims Act allegations that it made payments in violation of the Anti-Kickback Act in return for influence over the sale of Adobe software to the federal government.

Adobe Inc. Agrees to Pay $3 Million to Settle Kickback Allegations Involving Federal Software Sales Adobe Inc. has agreed to pay $3 million to resolve False Claims Act allegations that it made payments in violation of the Anti-Kickback Act in return for influence over the sale of Adobe software to the federal government.

Adobe Inc. has agreed to pay $3 million to resolve False Claims Act allegations that it made payments in violation of the Anti-Kickback Act in return for influence over the sale of Adobe software to the federal government.