U.S. Sues Adobe Over Subscriptions
FTC (PDF, via Hacker News):
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.
[…]
According to the complaint, when consumers purchase a subscription through the company’s website, Adobe pushes consumers to its “annual paid monthly” subscription plan, pre-selecting it as a default. Adobe prominently shows the plan’s “monthly” cost during enrollment, but it buries the early termination fee (ETF) and its amount, which is 50 percent of the remaining monthly payments when a consumer cancels in their first year. Adobe’s ETF disclosures are buried on the company’s website in small print or require consumers to hover over small icons to find the disclosures.
[…]
In addition to failing to disclose the ETF to consumers when they subscribe, the complaint also alleges that Adobe uses the ETF to ambush consumers to deter them from cancelling their subscriptions. The complaint also alleges that Adobe’s cancellation processes are designed to make cancellation difficult for consumers. When consumers have attempted to cancel their subscription on the company’s website, they have been forced to navigate numerous pages in order to cancel.
Customers encounter similar obstacles when attempting to cancel their subscriptions over the phone or via live chats, the DOJ alleges. The complaint claims “subscribers have had their calls or chats either dropped or disconnected and have had to re-explain their reason for calling when they re-connect.”
[…]
In 2012, Adobe went from selling its creative software for lifetime use to charging users for a monthly or yearly subscription to its suite of products, including Photoshop, Illustrator, InDesign, and others. The company’s subscription model has long frustrated creatives, who are often forced to stay subscribed to Adobe in order to keep doing their jobs.
Despite being full of passionate, talented people who genuinely care about artists, the company has earned its negative reputation. To no fault of the people who make the Adobe software that so many use daily, the company’s beleaguered customers do not trust Adobe.
Previously:
- Updated Adobe Terms of Use
- Adobe Abandons Figma Acquisition
- Adobe at 40
- Amazon Prime Dark Patterns Lawsuit
Update (2024-06-18): Nick Heer:
The contours of the case itself bear similarities to the Amazon Prime one, too. In both cases, customers are easily coerced into subscriptions which are difficult to cancel. Executives were aware of customer complaints, according to the FTC, yet they allegedly allowed or encouraged these practices. But there are key differences between these cases as well.
See also: Mac Power Users Talk, MacRumors.
Update (2024-07-26): Ben Lovejoy (Hacker News):
An Adobe exec is quoted as describing its hidden pricing strategy as being “a bit like heroin.” The remark was revealed when the government released its unredacted complaint, which accuses the company of deliberately making it hard to cancel a Creative Cloud subscription.
The exec acknowledged customer anger at the way the company made its contractual terms hard to understand, but said that improving this would result in “taking a big business hit” …
[…]
Adobe’s chief in-house lawyer Dana Rao claimed that the remark was taken out of context, and that the employee who made it was not a C-level employee who could make decisions on such matters. The company also claimed that revealing the penalty fee would make the user interface “very cluttered.”
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If phone carrier are not allowed to charge a cancellation fee, why is Adobe allowed to?
It's kind of funny that this post is right next to the one where Michael writes this:
"It reminds me of nothing so much as the current American political situation. No big deal if you’re unhappy with one of the two main candidates—you can just vote for the other guy!"
The reason the FTC has been on a tear recently is because Biden appointed Lina Khan as its Chair. Not because this helps him politically, because it doesn't. Not because it helps him with donations from big corporations, because it sure as hell doesn't do that, either. He did it because that's what the FTC needed.
I know it's en vogue to hate everything, and our media landscape is certainly set up to make us angry at everything because that generates ad views. And no, Biden is not perfect. But he sure as hell isn't just one of two similarly terrible candidates.
Subscription is a deal breaker. No way! Why? Subscription could have worked when it started with one or a few applications, but with many applications now is a deal braker! No more subscriptions!
Good. About time. The one thing I've been all in on during the this Presidency is how many companies have been targeted for scrutiny. Long overdue.
I note this issue is for people who subscribed direct from Adobe via their website and not via the App Store where subscription cancellations are handled differently.
Just saying.
@Michael I’m sure there are but haven’t experienced either of those issues in 15+ years of use - to be clear I think Apple don’t curate the App Store anywhere near well enough and have allowed scammy apps and ones that include loot boxes aimed at children and the terrible way they set up App Store ads that result in a search surfacing what you are not looking for before it shows you what you are looking for etc etc.
But it has to be mentioned that subscriptions are handled is way better via the App Store than virtually any company you subscribe to via the web.
@Niall Yes, I would say that Apple’s subscriptions system makes it easy to manage so long as you don’t need any support from a human (mistaken charge, need to change plans, or something).
