In recent years, the Federal Trade Commission (FTC) has cracked down on companies that engage in deceptive business practices and unfair trade practices. While these actions are typically targeted at large corporations, small businesses can also find themselves under scrutiny from the FTC. One such company facing a lawsuit from the FTC is Adobe.

On March 3, 2021, the FTC announced that it was suing Adobe for violating the Restore Online Shoppers’ Confidence Act (ROSCA). According to the FTC, Adobe’s fees and cancellation policies were deceptive and harmed consumers. In this article, we will take a closer look at the details of the FTC’s lawsuit against Adobe and what it means for both the company and its customers.

Background on ROSCA and the FTC’s Lawsuit Against Adobe

Before diving into the specifics of the FTC’s lawsuit against Adobe, it’s important to have an understanding of the relevant laws and regulations that are involved. In this case, the main law at play is the Restore Online Shoppers’ Confidence Act, or ROSCA for short.

ROSCA was passed by Congress in 2010 and is aimed at protecting consumers from deceptive post-transaction marketing practices. These types of practices occur when a consumer makes a purchase online and then is enrolled in a continuity program without their knowledge or consent. Continuity programs are recurring charges for products or services that are automatically charged to a consumer’s credit or debit card.

Under ROSCA, companies must clearly disclose all material terms of a negative option feature (which includes continuity programs) before obtaining the consumer’s billing information. Additionally, companies must obtain the consumer’s express informed consent before charging them for any recurring fees.

With this background in mind, let’s take a closer look at the FTC’s lawsuit against Adobe.

Adobe’s Alleged Violations of ROSCA

According to the FTC’s complaint, Adobe violated ROSCA in two ways. First, Adobe allegedly failed to clearly disclose all material terms of its subscription-based software services. Instead, the company buried these terms in lengthy license agreements and other documents that most consumers never read.

Second, the FTC claims that Adobe charged consumers for automatic renewals of their subscriptions without obtaining their express informed consent. The FTC alleges that instead of obtaining consent from consumers, Adobe used deceptive practices such as pre-checking a box to automatically enroll customers into automatic renewal programs.

As a result of these alleged violations, the FTC is seeking a permanent injunction against Adobe, as well as monetary penalties and restitution for affected consumers.

Understanding Adobe’s Fees and Cancellation Policies

To fully understand the allegations against Adobe, it’s important to take a closer look at the company’s fees and cancellation policies. In this section, we will break down the different fees associated with Adobe’s subscription-based software services and examine their cancellation policies.

Types of Fees Charged by Adobe

Adobe offers a variety of software products and services, including Creative Cloud, Acrobat, and Document Cloud. These products are available on a subscription basis, meaning that users pay a recurring fee to access them. According to the FTC’s complaint, Adobe charges both initiation fees and recurring fees for its subscription-based services.

Initiation fees are charged when a customer first signs up for an Adobe service. These can range from $19.99 to $49.99, depending on the specific product or service being purchased. Recurring fees, on the other hand, are charged on a monthly or annual basis to maintain access to the service.

In addition to these fees, Adobe also offers certain features for an additional charge, such as the ability to edit PDFs or convert files to Microsoft Office formats. These fees can vary depending on the specific feature and the plan a customer has subscribed to.

Cancellation Policies and Practices

The FTC’s lawsuit alleges that Adobe’s cancellation policies were deceptive and violated ROSCA. Under ROSCA, companies must clearly disclose all terms related to automatic renewals and obtain the consumer’s express informed consent before charging them for any recurring fees.

However, according to the FTC, Adobe failed to do this. Instead, the company’s cancellation policies were buried in lengthy license agreements and other documents that most consumers never read. As a result, many customers were unaware that their subscriptions would automatically renew and that they would be charged for these renewals without their prior consent.

Additionally, the FTC alleges that Adobe used deceptive practices to enroll customers into automatic renewal programs. For example, the company pre-checked boxes on its website to automatically sign up customers for automatic renewals without their knowledge or consent.

What This Means for Adobe and Its Customers

So, what does the FTC’s lawsuit against Adobe mean for the company and its customers? For Adobe, it could result in significant financial penalties and damage to its reputation. The FTC is seeking monetary penalties and restitution for affected consumers, which could add up to millions of dollars. Additionally, the negative publicity surrounding the lawsuit could harm Adobe’s brand and lead to a loss of customers.

For customers, the outcome of the lawsuit could also have significant implications. If the FTC is successful in its allegations, Adobe may be required to change its fees and cancellation policies to comply with ROSCA. This could mean clearer disclosure of all material terms and obtaining express informed consent from customers before charging them for automatic renewals.

What Consumers Can Do

If you are a current or former customer of Adobe’s subscription-based services, you may be wondering what actions you can take in light of this lawsuit. While there is currently no way to directly participate in the lawsuit, there are steps you can take to protect yourself in the future.

First, closely review your credit or debit card statements for any unexpected charges from Adobe. If you see any, contact your financial institution and dispute the charge. Additionally, consider reviewing your account settings on Adobe’s website to ensure that you are not enrolled in any automatic renewal programs without your knowledge or consent.

Second, be cautious when signing up for any subscription-based services. Before providing your billing information, carefully review all terms and conditions and make sure you understand what you are agreeing to. If you have any questions or concerns, reach out to the company directly for clarification.

The Future of ROSCA and the Importance of Consumer Protection

The FTC’s lawsuit against Adobe is just one example of the agency’s continued efforts to protect consumers from deceptive business practices. However, it also highlights the need for stronger consumer protection laws and regulations, particularly when it comes to online transactions.

As more and more companies move towards subscription-based models and automatic renewals, it’s crucial that consumers are fully informed and have control over their purchases. This is where laws like ROSCA play a crucial role in protecting consumers and holding companies accountable for their actions.

The Role of Consumers in Protecting Themselves

While laws and regulations are important, consumers also play a key role in protecting themselves from deceptive business practices. By being informed and vigilant about their purchases, consumers can spot potential red flags and take action to protect themselves.

Additionally, by reporting any suspicious or deceptive practices to the appropriate authorities, consumers can help hold companies accountable and prevent others from falling victim to similar schemes.

Conclusion: Understanding the FTC’s Lawsuit Against Adobe

In conclusion, the FTC’s lawsuit against Adobe sheds light on the importance of consumer protection and the consequences companies face for engaging in deceptive business practices. While the outcome of the lawsuit is still uncertain, it serves as a reminder to both businesses and consumers alike to be aware of their rights and responsibilities when it comes to online transactions. By staying informed and taking action when necessary, we can all play a role in creating a fair and transparent marketplace for everyone.