US sues Adobe for making huge money from termination of subscription

The U.S. government has sued Adobe, the maker of Photoshop and Acrobat, saying the technology giant is harming consumers by enrolling them in its most lucrative subscription plans without clearly disclosing important terms.
Adobe AI tools

Adobe’s revenue from subscription has reached $5.060 billion during the March quarter of 2024. Adobe does not reveal how much it earns via termination fees in a year. Adobe is targeting Digital Experience subscription revenue of $4.8 billion during the fiscal 2024.

The U.S. government, in a complaint filed in the San Jose, California, federal court, said Adobe failed to adequately disclose early termination fees, sometimes reaching hundreds of dollars, when customers sign up for annual, paid monthly subscription plans, Reuters news report said.

Adobe website says if the customer cancels within 14 days of initial order, the customer will be fully refunded. If the customer cancels the purchase after 14 days, customer will be charged a lump sum amount of 50 percent of the remaining contract obligation and the service will continue until the end of that month’s billing period.

Adobe says customers can cancel the trial or individual plan (purchased from Adobe) through Adobe account page. Adobe community forum says the he early cancellation fee is because the customers took an annual subscription, and the customer is breaching the contract.

The government said Adobe hides important terms in fine print and behind textboxes and hyperlinks, clearly discloses the fees only when subscribers try to cancel, and makes canceling an onerous and complicated process.

Monday’s lawsuit seeks civil fines, an injunction and other remedies. Adobe is yet to share its comment on the court case.

Baburajan Kizhakedath

Related News

Latest News

Latest News