Adobe has been slapped with a class action lawsuit that accuses the software giant of engaging in an illegal "automatic renewal" scheme that locks consumers into subscription plans for software products like Photoshop and Illustrator.
Plaintiff Vikram Singh filed the class action lawsuit against Adobe Inc. on July 1 in a California federal court, alleging violations of state and federal consumer laws.
According to Singh, Adobe unlawfully enrolls consumers into auto-renewal programs without providing the necessary disclosures and authorizations as required by California's Automatic Renewal Law (ARL).
Adobe, a leading developer of document, photo, and video editing softwares, offers a range of subscription plans that provide access to features that aren’t available through free memberships, Singh says.
These plans, marketed through Adobe's website, include popular platforms such as Photoshop, Illustrator, and more. Consumers can sign up for these subscriptions by providing their billing information.
However, after a consumer has provided their billing information for one subscription cycle, Adobe allegedly goes on to renew the subscriptions automatically, charging the consumers' payment methods on a monthly or annual basis without obtaining their explicit consent, Singh says.
“The enrollment process for Adobe subscriptions on the Adobe website uniformly violates each of the core requirements of the ARL,” Singh states. “Defendant also makes it exceedingly difficult and unnecessarily confusing for consumers to cancel their Adobe subscriptions.”
Singh says he began a free trial of Adobe's "Creative Cloud All Apps 100GB" in June 2022, which automatically converted to a $29.99 monthly subscription at the trial's end.
When he tried to cancel the subscription, Singh discovered he was enrolled in an "Annual, paid monthly" plan, requiring a significant “Early Termination Fee” of 50% of the balance for the remaining months of the Adobe Subscription in order to cancel after 14 days.
Singh ultimately continued his subscription to avoid the hefty fee, but successfully canceled it in May 2023 by paying a reduced fee of $15 plus tax.
The lawsuit says that Adobe's practices violate several core parts of the ARL.
Adobe is accused of failing to present the automatic renewal terms in a clear and conspicuous manner, not obtaining affirmative consent from consumers before charging their payment methods and failing to provide an acknowledgment that includes the renewal terms and cancellation policy.
Singh alleges that Adobe's failure to adhere to these regulations constitutes a breach of the ARL, resulting in the automatic renewal charges being deemed "unconditional gifts" under the law.
As a result, he’s looking to represent all California subscribers who incurred unauthorized renewal fees from Adobe's subscription services.
He’s suing for violations of the ARL and California's Unfair Competition Law, False Advertising Law, Consumers Legal Remedies Act, as well as unjust enrichment, negligent misrepresentation and fraud. He’s seeking certification of the class action, damages, fees, costs and a jury trial.
The lawsuit comes after the U.S. government sued Adobe for a similar issue last month, accusing the company of harming consumers by enrolling them in its most lucrative subscription plans without clearly disclosing important terms. The government said Adobe failed to adequately disclose hefty early termination fees, sometimes reaching hundreds of dollars, when customers sign up for “annual, paid monthly” subscription plans.
In 2023, Adobe agreed to pay $3 million to resolve False Claims Act allegations that it made payments in violation of the Anti-Kickback Act in return for influence over the sale of Adobe software to the federal government.
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