Now Adobe Is Getting Sued by the U.S. Government

Adobe just can’t catch a break. After raising eyebrows earlier this month with new terms of service that had users worried the company would be poking through their files and potentially training AI on their work, the Photoshop maker is now coming under fire by the FTC, this time over alleged dishonest pricing. The government organization is suing Adobe over its hidden fees and hard to cancel subscriptions.

In a complaint filed on Monday, the FTC said, “Adobe has harmed consumers by enrolling them in its default, most lucrative subscription plan without clearly disclosing important plan terms.” In a related blog post, the regulator dinged Adobe for not making it clear that the subscription is a one-year commitment that charges 50% of any remaining payments when canceled, which can amount to “hundreds of dollars.”

The FTC also complained about Adobe’s poor treatment of customers who are trying to cancel. “Subscribers have had their calls or chats either dropped or disconnected and have had to re-explain their reason for calling when they re-connect,” reads the complaint.

In a statement, FTC Bureau of Consumer Protection director Samuel Levine said “Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel.”

The lawsuit targets Adobe executives Maninder Sawhney and David Wadhwani directly, implicating them for their control and authority in implementing such practices.

The complaint follows an investigation that began in 2022. Despite being aware of the increased scrutiny, “Adobe has nevertheless persisted in its violative practices to the present day,” the FTC says.

Currently, there are 20 different plans for individual subscribers listed on Adobe’s website, with more options available as you click through the listed cards. The Creative Cloud All Apps plan, which is highlighted with a “Best Value” banner, does say that a “fee applies if you cancel after 14 days” for its “Annual, paid monthly” tier, although it does not provide specifics on the amount, even when you hover over an info button. Customers can go as far as entering payment information without seeing the final figure.

In a statement posted to the company's newsroom, Adobe General Counsel and Chief Trust Officer Dana Rao said, "We are transparent with the terms and conditions of our subscription agreements and have a simple cancellation process. We will refute the FTC's claims in court."