Adobe’s controversial billing practices and penalties for early subscription termination have been likened to “heroin” for the company by an executive, an unredacted FTC submit Has claimed.
The FTC lawsuit alleges that Adobe fails to provide adequate information about its annual, monthly subscription plans, thereby harming and misleading consumers. Consumers are often unaware of the significant early termination fees.
The Federal Trade Commission also suggests that fewer consumers would subscribe to Adobe’s suite of creative apps if Adobe were more transparent about its subscription costs.
Adobe Faces Early Termination Fines Again
The complaint alleges that an Adobe executive admitted that the hidden fees are essential to the company’s revenue model, despite the fact that they can mislead customers.
“As one (unnamed) Adobe executive admitted, the hidden (early termination fee) is ‘a bit like heroin to Adobe’ and ‘there is absolutely no way to eliminate (early termination fee) or talk about it more clearly (without) taking a major business hit,’” the document said.
In response, Adobe disputes the FTC’s assertions, saying the agency selectively chooses material to support its case. The executive who made the “heroin” comparison is not part of Adobe’s leadership team, a company representative said.
Dana Rao, General Counsel and Chief Trust Officer, emphasized that the financial impact of the early termination charges on Adobe’s revenue is modest, amounting to less than 0.5% globally.
While the software company lists details about the early termination fee on its website, the FTC alleges in its lawsuit that the information is not clearly available during the sign-up process.
Adobe plans to fight the FTC’s claims in court – Ny Breaking has asked the company for comment on the matter, but we have not yet received a response.