FTC probes Adobe for cancellation fees

The Federal Trade Commission could force Adobe pay a fine for its notorious cancellation policies that can charge expensive pro-rated cancellation fees.

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Adobe tells investors that it is facing an FTC probe for its widely-contested cancellation fees.

FTC probes Adobe for cancellation fees 1

Digital creative software giant Adobe could be facing considerable fines from US regulators. The Federal Trade Commission is currently investigating the cancellation policy for Adobe's subscription-based software suite.

The consumer protection agency is scrutinizing Adobe under the lens of the Restore Online Shoppers' Confidence Act, a new law passed in 2023 that requires businesses to clearly identify the terms of subscriptions, including any cancellation fees, upon consumer signup. The FTC recently filed a complaint alleging that Amazon's policies violate ROSCA.

Now in a recent 8-K SEC filing to investors, Adobe confirms that it is being investigated by the Commission:

"Since June 2022, we have been cooperating with the Federal Trade Commission ("FTC") staff in response to a Civil Investigative Demand seeking information regarding our disclosure and subscription cancellation practices relative to the Restore Online Shoppers' Confidence Act.

"In November 2023, the FTC staff asserted that they had the authority to enter into consent negotiations to determine if a settlement regarding their investigation of these issues could be reached.

"We believe our practices comply with the law and are currently engaging in discussion with FTC staff. The defense or resolution of this matter could involve significant monetary costs or penalties and could have a material impact on our financial results and operations."

In the company's recent FY23 earnings report, Adobe management confirms the creative mogul generated $19.41 billion in revenue, with $6.65 billion in operating profit:

"Our strong performance reflects the mission-critical role our products play in a digital-first world, incredible product innovation and exceptional execution," Adobe CEO Shantanu Narayen said in the report.

"Adobe Creative Cloud, Document Cloud and Experience Cloud have become the foundation of digital experiences, starting with the moment of inspiration, to the creation and development of content and media, to the personalized delivery and activation across every channel. Adobe's mission of changing the world through personalized digital experiences and our delivery of foundational technology platforms set us up for the next decade of growth."

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NEWS SOURCES:sec.gov, bloomberg.com

Derek joined the TweakTown team in 2015 and has since reviewed and played 1000s of hours of new games. Derek is absorbed with the intersection of technology and gaming, and is always looking forward to new advancements. With over six years in games journalism under his belt, Derek aims to further engage the gaming sector while taking a peek under the tech that powers it. He hopes to one day explore the stars in No Man's Sky with the magic of VR.

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