Adobe exec compared Creative Cloud cancellation fees to 'heroin'
Adobe is under FTC scrutiny for hidden early termination fees and complex cancellation processes in its Creative Cloud subscriptions. The case may impact how subscription services disclose fees and manage cancellations.
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Adobe is facing scrutiny from the FTC over its Creative Cloud subscription practices, particularly regarding hidden early termination fees (ETFs) and complicated cancellation processes. An executive's comment likening these fees to "heroin" has drawn attention, suggesting that the company is aware of the negative impact of these practices but feels unable to change them without significant business repercussions. The FTC's complaint alleges that Adobe has not clearly disclosed the ETFs associated with its annual plans billed monthly, which can lead to consumer confusion and dissatisfaction. Adobe's general counsel, Dana Rao, defended the company, stating that the fees represent a small fraction of its revenue and that the company has been working to improve its subscription practices since 2021. Rao emphasized that the cancellation process has been streamlined and that the company is committed to addressing consumer feedback. He also noted that calculating and displaying the ETF upfront is complex due to its dependence on the timing of cancellation. The FTC's case is complicated by a recent Supreme Court ruling that may allow Adobe to challenge the FTC's interpretation of what constitutes a "clear and conspicuous" disclosure. Rao expressed confidence in Adobe's legal position, arguing that its cancellation process is among the better ones in the industry. The outcome of this case could have significant implications for how subscription services disclose fees and manage cancellations.
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Adobe exec compared Creative Cloud cancellation fees to 'heroin'
Adobe is under FTC scrutiny for its Creative Cloud subscription practices, particularly hidden early termination fees and complex cancellation processes, which may lead to consumer confusion and dissatisfaction.
17 commentsBut I'm sure Adobe's servers have no issue calculating that fee afterwards.
I can't see how they can remotely argue in court against implementing such a simple requirement like "show the exact cancellation fee before the client accept".
This feels extremely disingenuous.
Because how many people see the early termination fee and then decide to continue with Adobe for the remainder of the year rather than switch to a competitor, because of the sunk cost?
The point of the early termination fee isn't to get people to pay it. Measuring how many people pay it is to miss the point entirely.
The point of the early termination fee is to prevent people from cancelling entirely. It would be much more interesting to see how many people try to cancel, get to the point where it reveals how much they'll be charged to cancel, and then don't.
Great, so you should have no issue removing them altogether because it's not really a material source of revenue and it would result in meaningfully more satisfied users.
> “I look at a lot of cancellation flows that are out there. There’s people you can’t even cancel online, you have to call. That doesn’t seem simple at all. When you start talking about the the range of what a cancellation flow can and should be, we’ve always been in the category of good, and we want to be great.”
Who are you looking at that requires calling? Certainly not big names like Adobe. This is such a disingenuous argument that it almost counts as evidence that Adobe's culture is one of trying to mislead.
> Adobe updated the design again in June 2023.
Well, it’s been a few years Adobe, and whatever “overhauls” you did clearly didn’t solve the problem!
0: https://www.ftc.gov/news-events/news/press-releases/2024/06/...
Whenever someone complains that you've taken something "out of context" your response is "OK, so what's the 'context'? "
As for unexpected charges being placed on your credit card: you always use a temporary, amount-limited card, which a lot of institutions offer. I use privacy.com.
Someone always says here, "Oh, but they can still come after you." But they don't. You should make a best effort to follow their rules, stop using the service, and then close the card. "Cards becoming invalid" are an event handled in their normal course of business.
Maybe the specific fee isn't disclosed, but looking at the screenshot it's quite clear that the monthly option says "cancel anytime" and the annual-billed-monthy option is a year commitment and "fee applies if you cancel after 14 days."
Anyone who was later surprised didn't read what they were buying. This didn't look confusing or deceptive to me at all.
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Adobe exec compared Creative Cloud cancellation fees to 'heroin'
Adobe is under FTC scrutiny for its Creative Cloud subscription practices, particularly hidden early termination fees and complex cancellation processes, which may lead to consumer confusion and dissatisfaction.