FTC Civil Suit Accuses Adobe, Two Execs of Illegal Actions on Subscriptions

The Justice Department, together with the Federal Trade Commission (FTC),  announced a civil enforcement action against Adobe Inc. and two Adobe executives, Maninder Sawhney and David Wadhwani, for illegally making it difficult for millions of customers to cancel subscriptions.

The civil action, according to the U.S. Attorney’s Office for Northern California, alleges violations of the Restore Online Shoppers’ Confidence Act (ROSCA). The lawsuit alleges that the defendants imposed a hidden “Early Termination Fee” on millions of online subscribers and that “Adobe forced subscribers to navigate a complex and challenging cancellation process designed to deter them from canceling subscriptions they no longer wanted.”

“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel.”

In response to the FTC’s allegations, Adobe's General Counsel and Chief Trust Officer, Dana Rao, stated that the company is “transparent with the terms and conditions of its subscription agreements and has a simple cancellation process.”

“Adobe plans to refute the FTC's claims in court,” he said in a statement. The company has been promoting its subscription-based model since 2012, which has significantly contributed to its revenue.

San Jose-based Adobe Inc.offers online subscriptions to design and productivity software applications via its website, Adobe.com. David Wadhwani is Adobe’s President of Digital Media Business, and Maninder Sawhney is Adobe’s Vice President of Digital Go to Market & Sales.

According to a complaint filed in the U.S. District Court for the Northern District of California, “the defendants have systematically violated ROSCA by using fine print and inconspicuous hyperlinks to hide important information about Adobe’s subscription plans, including about a hefty Early Termination Fee that customers may be charged when they cancel their subscriptions.”

The complaint alleges that “for years, Adobe has profited from this hidden fee, misleading consumers about the true costs of a subscription and ambushing them with the fee when they try to cancel, wielding the fee as a powerful retention tool.”

The complaint alleges that Adobe has further violated ROSCA by failing to provide consumers with a simple mechanism to cancel their recurring, online subscriptions. Instead, “Adobe allegedly protects its subscription revenues by thwarting subscribers’ attempts to cancel, subjecting them to a convoluted and inefficient cancellation process filled with unnecessary steps, delays, unsolicited offers and warnings,” according to the complaint.

The government lawsuit seeks unspecified amounts of consumer redress and monetary civil penalties from the defendants, as well as a permanent injunction to prohibit Adobe from engaging in future violations.

“Companies that sell goods and services on the internet have a responsibility to clearly and prominently disclose material information to consumers,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “It is essential that companies meet that responsibility to ensure a healthy and fair marketplace for all participants. Those that fail to do so, and instead take advantage of consumers’ confusion and vulnerability for their own profit, will be held accountable.”

“The Justice Department is committed to stopping companies and their executives from preying on consumers who sign up for online subscriptions by hiding key terms and making cancellation an obstacle course,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to enforce ROSCA against those who engage in such misconduct. No company, whether it is a small business or a member of the Fortune 500 like Adobe, is above the law.”


Three decades of journalism experience, as a writer and editor with Gannett, Knight-Ridder and Lee newspapers, as a business journal editor and publisher and as a weekly newspaper editor in Scotts Valley and Gilroy; with the Weeklys group since 2017. Recipient of several first-place writing and editing awards, California News Publishers Association.


  1. To the other poster: Would you pay to see a movie? Would you pay to watch a baseball game? Would you respond to that pop-up from SJI soliciting money before you even got to this page?

    Let’s not conflate a subscription-based business model with deceptive business practices.

  2. Would you pay to see a movie?

    not a subscription

    Would you pay to watch a baseball game?

    not a subscription

    Would you respond to that pop-up from SJI soliciting money before you even got to this page?

    not a subscription

  3. I have experience of Adobe charging me $70 for something that was listed as free download. I had to dispute it with my credit card company. Eventually I they gave me a refund.

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