Adobe cannot escape claims that it trapped customers in onerous subscriptions for Photoshop and other software products in violation of the Restore Online Shoppers’ Confidence Act, a US federal judge has ruled.
US District Judge Noël Wise found the company must face the US Federal Trade Commission’s lawsuit accusing Adobe, along with executives Maninder Sawhney and David Wadhwani, of duping customers into enrolling in its priciest annual subscription plan and then saddling them with onerous “stealth” cancellation fees and hurdles.
The lawsuit, filed last year in the Northern District of California, followed a years-long investigation into Adobe’s cancellation practices.
Adobe is just one in a string of Silicon Valley stars to feel the FTC’s wrath over alleged “dark patterns,” or website and app features that make it easier for unwitting consumers to make purchases or part with their data.
In June 2023, the FTC sued Amazon, accusing the e-commerce giant of duping customers into signing up for Prime, then thwarting their efforts to cancel the automatically renewing service. The case is set for trial in September.
Other big-name companies have opted to settle. In November 2022, the FTC reached a $100 million settlement with Vonage over automatic phone plan renewals and termination fees.
It also exacted a whopping $520 million settlement from Fortnite maker Epic Games after alleging it misled players — many of them children — into making unintentional in-game purchases.
While Adobe said in a securities filing that it cooperated with the FTC’s investigation, it swiftly refuted the agency’s claims and tried to get the lawsuit dismissed.
But the company was unsuccessful. Wise said that the FTC’s complaint “sufficiently alleges that a reasonable consumer would be misled by Adobe’s disclosure of the ETF [Early Termination Fee], including what it is, when it applies, how much it is, and how that amount is calculated.”
She also found that Adobe’s “Subscription and Cancellation Terms” page, accessible after much scrolling, “is not easily noticeable or easily understandable by ordinary consumers.”
Wise seemed to agree with the FTC’s characterisation that cancelling an Adobe plan is far from simple.
“By the court’s count, the process requires eight clicks, including selecting a box for feedback, and eight screens, many of which entice the customer not to cancel their subscription, before the customer can finally cancel their Adobe subscription, she wrote. “Not only is this process difficult, confusing and time consuming,” but it’s not nearly as simple as signing up for a subscription.
Customers who try to cancel by chat or phone are transferred to multiple representatives and face long wait times or dropped calls. “The process is difficult and confusing,” Wise wrote.
Sawhney, senior vice president of digital go-to market and sales, and Wadhwani, Adobe’s president of digital media business, are also on the hook for Adobe’s practices, as customers and employees frequently complained about Adobe’s enrollment flow, early termination fee and burdensome cancellation process.
“Both had a high degree of participation in Adobe’s ETF and APM [Annual Paid Monthly] plan practices and helped guide business strategy. They were aware of customer complaints and discussed them with other executives at Adobe. They made critical decisions and contributed to ETF policies,” Wise wrote, adding that as executives, they were also well aware of the government and regulatory scrutiny into Adobe’s practices.
Hitesh Choudhary via Pixabay
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