Now Uncle Fed is suing Adobe…but not over that issue.
The United States Department of Justice and the Federal Trade Commission today levied a lawsuit against Adobe [PDF] for imposing a hidden termination fee on subscribers who want to cancel their Adobe plans. Adobe is accused of forcing subscribers to “navigate a complex and challenging cancellation process designed to deter them from cancelling subscriptions they no longer wanted.”
Adobe offers its Creative Cloud products on a subscription basis, with fees that are paid monthly. A monthly payment suggests that it’s possible to cancel anytime, but that’s not how Adobe works because most customers are actually locked into a hidden annual agreement.
Customers who sign up for a free trial and are then charged and signed up to the default Creative Cloud plan, which is actually an annual contract. Canceling the annual contract requires customers to pay a lump sum of 50 percent of the “remaining contractual obligation” to cancel, despite the fact that service ends that month.
Adobe does let customers sign up for a month-to-month subscription plan, but at a higher cost than the annual contract that’s paid monthly, and the difference is not always clear to new or existing customers. Adobe even has a whole help page because of the confusing nature of its subscription. If you look at the Adobe website, for example, Adobe lists a $60/month fee for accessing its full suite of apps, but that’s only if you agree to the annual contract. A true month-to-month plan that you can cancel anytime is $90/month, and if you pay for a year upfront, you get no money back when you cancel after a 14-day period.
If memory serves, back in the dim mists of time, $75 was around what I paid to upgrade from PageMaker 3.0 to 4.0. And that wasn’t a month, that was “Pay this fee once and use this software forever.” None of this pay $60 a month BS. Of course, I was running it on a Mac Plus running System 6.0.8 (which some still insist was the last truly stable Mac operating system), so that was four CPU architectures and innumerable OS versions ago. Now get the hell off my lawn before I hit you with my cane.
According to the DoJ, Adobe’s setup violates the Restore Online Shoppers’ Confidence Act (ROSCA) through the use of fine print and inconspicuous hyperlinks to hide information about the Early Termination Fee.
According to Kneon and Geeky Sparkles at ClownfishTV, Adobe’s own staff is none too happy about the draconian terms of service.
Geeky Sparkles: So Adobe will get punished, but Google can do all kinds of crap and take down all kinds of websites, and the Department of Justice doesn’t do anything about that.
Kneon: Yes.
GS: I’m just pointing that out.
K: A lot of companies are doing this, I’ve noticed this. They make it very, very hard to cancel, which is illegal.
K: Every time we’ve tried to cancel like Direct TV or something, you have to call them. You can’t just like do it on the website, and they always do that, and then they want to get you on the phone. They want to actually try to upsell you.
K: Comcast does that especially with their Internet. Oh yeah, it’s only going to be like you know 100 bucks a month or whatever, $200 a month. And then then after your trial is over whatever…they’re like. “Oh now it’s like $350 a month. You wanted usable Internet? Wow, that’s an up charge.”
K: The justice department alleges that Adobe hid early cancellation fees and trapped consumers in pricey subscriptions, so you have to pay a fee if you cancel. A lot of times they’re like “Oh yeah, it’s whatever a month,” but then you read the fine prints, you have to commit to two years.
K: The Department of Justice claims Adobe has harmed consumers by enrolling them in its default, most lucrative subscription plan without clearly disclosing important plan terms and this is on top of them being allowed to snoop in your files.
K: The lawsuit alleges Adobe hides the terms of its annual paid monthly plan in the fine print and behind optional text boxes and hyperlinks, and, in doing so, the company fails to properly disclose the early termination fees incurred upon cancellation that can amount to hundreds of dollars.
K: When the customers do attempt to cancel, the Department of Justice alleges Adobe requires them to go through an onerous and complicated cancellation process that involves navigating through multiple web pages and popups. It then allegedly ambushes customers with an early termination fee which may discourage them from canceling.
Try to cancel via livechat or over the phone? Expect your call to be mysteriously dropped.
K: They want you to get frustrated and just give up.
K: These practices break federal laws designed to protect consumers.
The lawsuit also targets “two Adobe executives, Maninder Sawhney and David Wadhwani, for alleged violations of the Restore Online Shoppers’ Confidence Act (ROSCA).”
K: Up until 2012, Adobe, you bought the software, you got it on a disc, you put it on your computer.
K: Though Adobe is doing some scummy stuff, it almost feels like somebody’s gunning for Adobe. Like this lawsuit drops a week or two after they get backlashed.
GS: It is weird, especially when you have Google out there doing all the weird stuff that’s been going on, with their websites and things. And a lot of sites are losing all their ad revenue because they’re not being found, or they’re shutting down because they they they just completely sunk in both traffic and revenue. And they’re allowed to tank thousands and thousands and thousands and tens of thousands of sites and that’s OK, and put up when they put up AI information that comes above everything else a lot of times it’s wrong.
One possible reason for the difference in treatment is that Adobe is screwing actual paying customers, while Google, in screwing random websites, may only be screwing people and companies with whom they have no actual contractual obligation to. Which is a big difference between software you pay for and software you use for free.
K: It does seem weird that it’s like “boom boom,” like this is a kill shot to take Adobe out of play.
GS: Two things can be correct at the same time. It does feel like they’re being targeted, but I also think that they kind of have it coming.
K: Apparently the community dissatisfaction with the company grew so intense that even Adobe’s own staff started expressing unhappiness about the whole ordeal.
To the point that someone in Adobe is evidently leaking internal slack threads to Business Insider.
K: The company’s workers appear to be siding with regular users voicing complaints about the terms of service updates and the resulting backlash, as well as Adobe’s poor communication and apparent mishandling of the situation.
K: “The general perception is Adobe is is an evil company that will do whatever it takes to fuck its users. Let’s avoid becoming IBM, which seems to be surviving primarily due to its entrenched market position and legacy systems.”
K: This is not the right time to be pushing your your AI stuff when creatives are worried about losing their jobs as it is.
Aside: I sort of hate that the word “Creatives” has become a thing, since it aggregates too many diverse sets of people (writers, artists, movie makers, graphic designers, etc.) into an amorphous class. It’s a fairly recent coinage, but I wonder if it’s already too late to stamp out that particular linguistic “innovation.”
K: They’re trying to say they never trained their AI on customer data, we never trained generative AI on customer content, taken ownership of a customer’s work or allowed access to customer content beyond legal requirements. People aren’t going to believe you.
GS: Then why word it the way you did? That doesn’t make any sense.
Indeed.
Adobe does indeed a lot of splainin to do, and those heinous terms should be revised before anyone gives Adobe another dime, since there are cheaper alternatives to just about everything they offer. But that’s not to say that there aren’t other tech giants out there with even more heinous policies (Google and Microsoft are two that immediately come to mind), with or without AI, and it is curious that Adobe, a relatively new and smaller player in the AI space, has suddenly been subjected to so much official heat.