FTC, DOJ Sues Adobe For Hiding Fees, Preventing Easy Cancelation Of Subscriptions

(RTTNews) - The US Department of Justice and the Federal Trade Commission has filed a lawsuit against Adobe Inc. (ADBE) for charging hidden termination fee from subscribers who want to cancel their Adobe plans.

According to the FTC, it is taking action against the software maker and two of its executives, Maninder Sawhney and David Wadhwani, for deceiving consumers by hiding the early termination fee for its most popular subscription plan and making it difficult for consumers to cancel their subscriptions.

Wadhwani is the president of Adobe's digital media business, and Sawhney is an Adobe vice president.

In a complaint filed in the San Jose, California, federal court, FTC said Adobe failed to adequately disclose hefty early termination fees, sometimes reaching hundreds of dollars, when customers sign up for "annual, paid monthly" subscription plans.

"Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles," said Samuel Levine, Director of the FTC's Bureau of Consumer Protection. "Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel. The FTC will continue working to protect Americans from these illegal business practices."

After 2012, Adobe shifted principally to a subscription model, requiring consumers to pay for access to the company's popular software on a recurring basis. Subscriptions account for most of the company's revenue.