Adobe faces a lawsuit regarding fees for terminating contracts, accused of misleading its customers

On Monday, the U.S. government filed a lawsuit against Adobe, a software manufacturer based in San Jose, and two of its executives. The lawsuit alleges that Adobe hindered customers’ efforts to cancel their subscriptions.

According to Adobe’s website, customers face an “Early Termination Fee” equivalent to 50% of their remaining contract if they cancel after 14 days.

However, the government’s complaint claims that Adobe concealed information about this fee in fine print and inconspicuous hyperlinks, which violates the Restore Online Shoppers’ Confidence Act. This legislation mandates that online sellers must clearly disclose all significant terms of a transaction to customers.

Federal prosecutors, in collaboration with the Federal Trade Commission, assert that Adobe’s termination fee misled customers about the actual cost of their subscriptions.

“We provide clear information about the terms and conditions of our subscription agreements and offer a straightforward cancellation process,” stated Dana Rao, Adobe’s general counsel and chief trust officer, in an online statement. “We intend to challenge the FTC’s allegations in court.”

The complaint, filed in the U.S. District Court for the Northern District of California, further alleges that Adobe subjected customers to a complex cancellation process, which also violates the Restore Online Shoppers’ Confidence Act.

“Companies selling goods and services online have an obligation to disclose material information clearly and prominently to consumers,” remarked U.S. Attorney Ismail Ramsey in a press release announcing the lawsuit. “It is crucial for companies to fulfill this obligation to ensure a fair and healthy marketplace for everyone involved. Those that fail to do so, and instead exploit consumer confusion and vulnerability for their own gain, will be held accountable.”

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