Fetch the popcorn: US government sues Adobe, says it's 'trapped' consumers with a subs model that's 'absurdly hard to cancel' and 'ambushed' them with late fees

Mallet of a judge, with books and scales of justice in background, of a court-like scene. on the floor, place for typography. Courtroom theme
(Image credit: Michał Chodyra via Getty Images)

In news that will delight any user of Photoshop, the US government is suing Adobe for allegedly harming consumers by "enrolling them in its default, most lucrative subscription plan without clearly disclosing important plan terms." 

The complaint from the Department of Justice (DoJ) claims that Adobe "hides" the true cost of its subscriptions in fine print, "behind optional textboxes and hyperlinks,” and deliberately makes cancelling a subscription "onerous and complicated" before it "ambushes" customers with termination fees.

The complaint further alleges that calls or live chats with Adobe support are often "either dropped or disconnected", breaking federal law, and then it takes aim at the executive suite. Maninder Sawhney, an Adobe vice-president, and David Wadhwani, president of digital media business, are named as having "directed, controlled, had the authority to control, or participated in the acts and practices of Adobe."

Adobe moved to a subscription-only business model in 2012 for its software suite, which is widely used both in the creative industries and by individuals. An Adobe "Creative cloud" subscription grants access to software including Acrobat, Illustrator, InDesign, Photoshop, Premiere, and more. 

"[The FTC] has taken action against Adobe and two executives for pushing people into subscriptions and then making it absurdly hard to cancel," writes FTC chair Linda Khan. "Adobe ambushed users with hefty 'early termination fees' and threw up obstacles when people tried to cancel.

"Adobe knew its policies made it extraordinarily difficult and frustrating for users who wanted to cancel their subscriptions [...] One person wrote 'Adobe literally will not let me cancel my subscription.' Because two senior executives were involved in overseeing, directing, controlling, or participating in Adobe's illegal business practices, they are named in the complaint."

The complaint has been filed in federal court in the Northern District of California by the DoJ, following a referral from the FTC. Among other choice language, it alleges Adobe "buries" its early termination fee and the amount (a whopping 50% of remaining monthly payments when a consumer cancels in their first year) in small print or by requiring "consumers hover over small icons to find the disclosures."

It says Adobe is aware of consumer "confusion" but nevertheless "continues its practice of steering consumers to the annual paid monthly plan while obscuring the [early termination fee]." It adds that the company forces consumers to "navigate numerous pages in order to cancel". Alternatively, they face "resistance and delay from Adobe representatives", and in some cases users who thought they'd cancelled subsequently found "the company continued to charge them."

These allegations certainly align with my personal experience. I used to have a copy of Photoshop that I'd mess around with, mainly to create bespoke header images for articles, before Adobe moved over to its subscription-based model. A few years later I needed to create an image, signed up for what I thought was a month's use of Photoshop, and ended up on the hook for hundreds of pounds. Just my opinion, but: Adobe deserves everything that's coming its way.

"Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles," said Samuel Levine, director of the Federal Trade Commission’s (FTC) Bureau of Consumer Protection. "Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel."

Rich Stanton

Rich is a games journalist with 15 years' experience, beginning his career on Edge magazine before working for a wide range of outlets, including Ars Technica, Eurogamer, GamesRadar+, Gamespot, the Guardian, IGN, the New Statesman, Polygon, and Vice. He was the editor of Kotaku UK, the UK arm of Kotaku, for three years before joining PC Gamer. He is the author of a Brief History of Video Games, a full history of the medium, which the Midwest Book Review described as "[a] must-read for serious minded game historians and curious video game connoisseurs alike."