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Adobe’s controversial practice of fining customers who cancel their subscriptions early is a consequence of the company’s reliance on that form of revenue, the FTC says. The company acknowledges this, the regulator says.
In June, the FTC sued Adobe, alleging that the company failed to adequately inform content creators about its subscription billing policies and cancellation fees. The software maker may disclose these details on its website, but they are allegedly not disclosed when signing up for a subscription.
The FTC alleges that Adobe executives know that “inadequate … disclosure” about its annual payment plans “misleads and harms consumers,” but the company’s management “continues to engage in these illegal activities because better disclosure would hurt Adobe’s profits by reducing subscription revenue.”
“As one Adobe executive admitted, the hidden ETF is ‘a bit like heroin for Adobe,’ and ‘there is absolutely no way to cancel the ETF or be more transparent about it (without) having a big impact on the business,'” the regulator said in a filing.
Adobe has publicly denied the FTC’s allegations. One company executive, speaking on condition of anonymity because of the sensitivity of public comment amid the lawsuits, suggested that the federal agency was simply gathering inflammatory discovery material to support a nonviable lawsuit. The person who made the heroin comparison, he said, is not a member of the executive team.
And yes, we know there’s something else in the photo, but how could we not take this screenshot?
US files lawsuit against Adobe over ‘deceptive’ subscriptions that are too hard to cancel
Source: The Register
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