Adobe hit with FTC lawsuit over allegations of 'trapping' customers

The Federal Trade Commission (FTC) has filed a lawsuit against Adobe, accusing the company of deceiving customers by enrolling them in its "Annual, Paid Monthly" subscription plan without clearly disclosing important terms. This subscription, costing $54.99 a month, provides access to Adobe software like Photoshop, Acrobat, and Illustrator. The lawsuit, filed on June 17, claims Adobe fails to adequately inform customers that they are committing to a yearlong subscription with a significant early termination fee, making it difficult for users to cancel. Adobe allegedly hides these terms in fine print and optional textboxes, and uses a complicated cancellation process that includes the surprise early termination fee. The FTC received numerous complaints from consumers who were confused about their subscriptions and shocked by the early termination fees. The FTC seeks injunctive relief, civil penalties, and equitable monetary relief through the lawsuit. Despite this legal action, Adobe's stock price remained stable, and the company reported a strong financial performance with $5.3 billion in revenue for the second quarter of 2024, a 10% increase from the previous year. Recently, Adobe also faced customer backlash over updated Photoshop terms of service related to using customer work for AI training.