Federal authorities have filed a lawsuit against Adobe over its subscription cancellation practices. —Bloomberg/Getty Images/The New York Times
It’s now a dozen years since Adobe became the poster child for what marketing folks and techies used to call the “software as a service” model.
This subscription-based approach has its advantages – you, the user, always get the latest features delivered to you – but it also means you’re constantly paying Adobe for as long as you want to use its products.
Now, it used to be the case that Adobe was an inescapable software provider for many if not most creative professionals, but some viable rivals have come up in recent years, such as Affinity (now owned by Canva) for photo editing and publishing layouts, and Blackmagic’s DaVinci Resolve for video.
Not only are these options hugely cheaper than Adobe’s Photoshop and InDesign and Premiere Pro respectively – DaVinci even has a free version that’s more than enough for most users – but they only require one-off payments.
However, Adobe has been making life very difficult for users who decide to cancel their subscriptions, according to a lawsuit filed yesterday by the Justice Department and the Federal Trade Commission – naming as defendants not only Adobe, but also senior executives David Wadhwani and Maninder Sawhney.
The complaint alleges that Adobe broke consumer protection law in two big ways: first, by pushing customers toward an “annual, paid monthly” plan while not clearly telling them that they’ll have to pay a “hefty” early termination fee (sometimes amounting to hundreds of dollars) if they cancel within the first year; and secondly, by prominently highlighting that fee when someone does try to cancel early, making the fee “a powerful retention tool”.
There are loads of redactions in this filing – the allegations specifically about Sawhney remain a complete mystery – but what’s on public display paints a pretty grim picture of Adobe’s cancellation process. Cancelling online means having to “navigate numerous pages with multiple options, much of which is wholly unnecessary to honor consumers’ cancellations requests,” and those trying their luck over the phone regularly find their calls dropped or disconnected.
The FTC also filed a complaint against Amazon a year ago, alleging that the ecommerce giant “knowingly duped” many users into signing up for its Prime subscription – and, again, making it difficult to cancel those subscriptions. Amazon has unsuccessfully tried to have that lawsuit dismissed, but it should go to trial early next year.
“Americans are tired of companies hiding the ball during subscription sign-up and then putting up roadblocks when they try to cancel,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a statement.
And here’s Adobe general counsel Dana Rao: “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.”
Either way, Adobe’s shareholders don’t seem to care much – the share price dipped a little yesterday before bouncing right back this morning. – Fortune.com/The New York Times
