Adobe faces US federal government lawsuit alleging it hides termination fees to trap subscribers

The US Department of Justice has today (17 June) begun a lawsuit against Adobe alleging that it has for years harmed consumers by enrolling them in a default subscription plan without disclosing a year-long commitment and hefty early termination fee (ETF).

The Government, acting on a referral from US consumer watchdog the Federal Trade Commission, alleges that Adobe only discloses the ETF, which can run into hundreds of dollars, when subscribers attempt to cancel their ‘annual, paid monthly’ (APM) plan. This turns the ETF, they say, “into a powerful retention tool by trapping consumers in subscriptions they no longer want.”

According to the complaint, which also goes after two named senior executives accused of overseeing the ETF, Adobe “hides material terms of its APM plan in fine print behind optional textboxes and hyperlinks, providing disclosures that are designed to go unnoticed and that most consumers never see.”

While this claim – which Adobe refutes – is not necessarily directly relevant to the enterprise business community, it has the potential to be long running and disruptive. You can read the lawsuit in full here:

Adobe’s general counsel and chief trust officer Dana Rao said in a statement: “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.”

The timing of the lawsuit is unfortunate as Adobe also today unveiled major innovations in Adobe Acrobat, with customers now able to create and edit images in PDFs using text prompts, powered by Adobe Firefly.

New features in Acrobat AI Assistant, a conversational engine integrated into Reader and Acrobat workflows, will allow customers to ask questions, get insights and create content from information across groups of PDFs – and other document types – including Microsoft Word, Microsoft PowerPoint, and text files. Adobe also announced enhanced meeting transcript capabilities in AI Assistant.

Abhigyan Modi, senior vice president of Adobe Document Cloud, said: “With generative AI we can advance the category again with image creation and insights across a new range of document types, empowering every customer with a deeper understanding and ability to transform information into compelling content – with the ease and speed of a simple prompt.”