On June 17th, 2024 the US Department of Justice filled a lawsuit against Adobe over their business practices, specifically their early cancellation fees and the difficulty customers face when attempting to cancel their Creative Cloud accounts. The initial filling was heavily redacted (PDF Link). Today however, the redacting has been removed (PDF Link) and what has been revealed has been pretty damning for Adobe.
Two sections that spring immediately to mind are:
- Defendants know that these inadequate APM plan disclosures harm and mislead consumers but continue to engage in these unlawful practices because better disclosures would hurt Adobe’s bottom line by reducing subscription revenues. As one Adobe executive admitted, the hidden ETF is “a bit like heroin for Adobe” and “there is absolutely no way to kill off ETF or talk about it more obviously [without] taking a big business hit[.]”
And:
- Adobe’s misconduct does not stop with concealing key APM plan terms to maximize profits. Adobe utilizes other onerous cancellation procedures to trap consumers in subscriptions they no longer want. Consumers attempting to cancel online are forced to navigate numerous hurdles, including hidden cancellation buttons and multiple, unnecessary steps such as pages devoted to password reentry, retention offers, surveys, and warnings. Consumers attempting to cancel via phone or chat experience dropped calls and chats, significant wait times, and repeated transfers. Adobe uses a dedicated “Retention” team to discourage subscribers who try to cancel. Adobe relies on such obstacles to thwart cancellations
and retain subscription revenues, depriving consumers of a simple mechanism to cancel as required by law.
Adobe have since responded to The Register by Dana Rao, general counsel and chief trust officer at Adobe:
Providing consistent innovation through flexible subscription plans that fit different needs, timelines and budgets is the best way to serve millions of customers. We strongly disagree with this lawsuit’s characterization of our business and we will refute the FTC’s claims in court. The complaint is taking an offhand comment out of context from years ago, out of the tens of thousands of documents Adobe provided to the FTC. The early termination fees equate to minimal impact to our revenue, accounting for less than half a percent of our total revenue globally, but is an important part of our ability to offer customers a choice in plans that balance cost and commitment.
You can learn more about the just unredacted filling in the DOJ vs Adobe lawsuit in the video below.