Adobe Inc (NASDAQ:ADBE) shares are trading lower after the company was legally challenged by the U.S. Federal Trade Commission, which is accusing the software giant and two of its executives, Maninder Sawhney and David Wadhwani, of deceptive practices related to its subscription cancellation policies.
The case, filed by the Department of Justice on behalf of the FTC, alleges significant consumer manipulation through Adobe’s subscription models.
The complaint asserts Adobe did not clearly disclose the hefty early termination fees associated with its “annual paid monthly” subscription plan.
This lack of transparency reportedly trapped consumers into costly year-long commitments.
Samuel Levine, director of the FTC's Bureau of Consumer Protection, criticized the company for obscuring the terms during the signup process and complicating the cancellation procedure to deter consumers from discontinuing their services.
Adobe responded to the FTC’s allegations. "Subscription services are convenient, flexible and cost effective to ...