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USA sues Adobe over hidden fees

18.6.2024

Translation: machine translated

Anyone who takes out an annual subscription with Adobe with monthly payment will receive a hefty bill if they cancel early. The US judiciary finds that this fee is not communicated transparently. This is detrimental to customers.

The US Federal Trade Commission (FTC) is suing Adobe. The trade authority is accusing the software giant of deceiving its customers with opaque fee structures. In addition, Adobe is building an unnecessary number of hurdles into the cancellation process. According to the lawsuit, the company is violating several consumer protection laws in the USA with these practices.

"For years, Adobe has harmed consumers by selling them its most lucrative standard subscription without clearly disclosing important terms of the plan," the FTC writes in its indictment. The hefty fee for early cancellation could amount to several hundred US dollars. However, it is hidden in small print behind optional text boxes and hyperlinks.

The annual subscription with monthly payment is selected by default when taking out a plan.
Source: Screenshot adobe.com

You won't find out how much the cancellation fee is behind the info field.
Source: Screenshot adobe.com

According to the FTC, Adobe is trapping consumers into subscriptions they no longer want. In addition to the surprising fee, a cumbersome and complicated cancellation process contributes to this. Customers are sometimes thrown off the phone or out of live chats when they try to cancel.

Adobe denies the allegations in a short statement: "We are transparent about the terms of our subscription agreements and have a simple cancellation process. We will refute the FTC's allegations in court."

Fee also applies in Switzerland

The biggest bone of contention is Adobe's fee for early cancellation of a monthly billed annual Creative Cloud subscription. It also applies in Switzerland: After a 14-day trial period, 50 per cent of the remaining annual costs will be due in the event of early cancellation.

An example calculation:

You subscribe to the entire Creative Cloud as an annual subscription with monthly billing. In Switzerland, this costs 65.95 francs per month - i.e. a total of 791.40 francs.
After just over five months, you cancel your subscription early at the end of the month because you no longer need it
Of the subscription costs for the remaining period (395.70 francs), Adobe charges you half as a one-off fee. So 197.85 francs.

In this example, you would pay a total of 593.55 francs for six months of Creative Cloud. That's more than if you subscribe for the same period in the non-binding monthly model without a cancellation period (590.10 francs). The following chart shows the total costs after certain periods if you cancel early with different subscription models:

The lawsuit against Adobe could have an impact on other suppliers. Many companies offer their services as a plan. The way in which fees and contract terms are communicated is increasingly the focus of regulatory authorities. If the lawsuit is successful, this could lead to higher transparency requirements - possibly not only in the USA.

This is the second time in a short space of time that Adobe has been criticised for its customer communication. Two weeks ago, the company adjusted its terms of use. It looked as if Adobe wanted to use user content to train its AI. Shortly afterwards, the company backtracked and claimed it was a misunderstanding.

Header image: Shutterstock

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Samuel Buchmann

Senior Editor

Samuel.Buchmann@digitecgalaxus.ch

My fingerprint often changes so drastically that my MacBook doesn't recognise it anymore. The reason? If I'm not clinging to a monitor or camera, I'm probably clinging to a rockface by the tips of my fingers.

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