Adobe’s subscriptions are too hard to cancel, the US gov't alleges

The US government on Monday sued Premiere Pro- and- Photoshop-maker Adobe and two of its execs for harming consumers by allegedly hiding expensive fees and making it difficult to cancel subscriptions.

Per the US, Adobe pushes users to sign up for its Annual Paid Monthly plan, which, if not canceled within the first 14 days, incurs a prorated cancellation fee, sometimes totaling hundreds of dollars. The government says Adobe hides important terms in fine print as well as behind text boxes and hyperlinks, and clearly discloses the fees only when subscribers try to cancel.

Speaking of which… The US also alleges that Adobe has violated federal laws by putting users trying to cancel a subscription through an “onerous and complicated” process that’s more difficult to navigate than Rainbow Road at 150cc. Adobe says it will fight the lawsuit.

Big picture: In 2012, Adobe shifted its sales model from selling lifetime use licenses – pay once, use whenever – to software as a service (SaaS) – pay monthly or yearly, lose access if you cancel. Subscription-based revenue accounted for $14.22 billion of Adobe’s $19.41 billion in total revenue last year, per the complaint.

⚖️ The US government is working to bring Force-like balance to the consumer signup/cancellation process. In March 2023, the FTC proposed a rule that would mandate recurring subscriptions are as easy to cancel as to sign up. It’s currently stuck in review, though many analysts predict an implementation date of later this year.