The U.S. Department of Justice (DOJ), on behalf of the Federal Trade Commission (FTC), has filed a lawsuit against Adobe Inc., alleging the software giant deceives consumers by hiding significant early termination fees and making its subscription cancellation process overly complicated. The complaint, filed in a California federal court, targets Adobe’s popular “annual, paid monthly” subscription plan, which is the default option for its widely used Creative Cloud suite of products like Photoshop and Illustrator.
According to the lawsuit, Adobe pushes consumers toward this plan without adequately disclosing that canceling before the year is up can result in a termination fee amounting to 50% of the remaining contract balance. This critical information, the government argues, is buried in fine print or behind optional tooltips and hyperlinks, violating federal consumer protection laws. The complaint also names two senior Adobe executives, Maninder Sawhney, Senior Vice President of Digital Go-To-Market & Sales, and David Wadhwani, President of Digital Media Business, as defendants.
The FTC alleges that Adobe’s cancellation process is a “convoluted and difficult maze” of web pages and chat sessions designed to deter customers from ending their subscriptions. “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 lawsuit seeks financial penalties against Adobe and a court order to block the company from continuing these alleged illegal practices. This legal action is part of a broader regulatory crackdown on “dark patterns” and subscription models that are easy to sign up for but notoriously difficult to exit, reflecting growing scrutiny of digital business practices.
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