Adobe To Pay $150M To Settle Alleged Violations Of Online Shopper Law

• The government alleged that Adobe violated ROSCA by using fine print and inconspicuous hyperlinks to hide important information about Adobe’s subscription plans.
• The complaint was filed in the U.S. District Court for the Northern District of California. 
• The government also alleged that Adobe thwarted subscribers’ attempts to cancel their subscriptions. 

The U.S. ‌Justice ‌Department said on ​Friday that Adobe has ‌agreed ⁠to a $150 million ⁠settlement ​to ​resolve allegations ‌that the software company’s subscription practices violated ‌the ​Restore ​Online ​Shoppers' ‌Confidence Act (ROSCA). 

The DOJ said that in addition to civil penalties and free services, Adobe will be required to clearly disclose any early termination fee and how the fee is calculated before enrolling customers in subscriptions. 

For any free trial lasting longer than seven days, Adobe must also remind customers before converting them into a paid subscription with an early termination fee. Furthermore, Adobe will be required to provide its subscribers with easy ways to cancel their subscriptions. 

“American consumers deserve the right to make informed choices when deciding where to spend their hard-earned money,” said Assistant Attorney General Brett A. Shumate, head of the Justice Department’s Civil Division. “The Justice Department will strongly oppose any attempt to harm Americans with deceptive and unfair business practices.”

Shares in the company closed 7.6% down on Friday, and were marginally up during the extended hours of trading. 

The Allegations

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

The government also alleged that Adobe thwarted subscribers’ attempts to cancel, subjecting them to convoluted and inefficient cancellation processes filled with unnecessary steps, delays, unsolicited offers, and warnings.

Retail Reaction

Retail reaction around ADBE trended in ‘extremely bullish’ territory amid ‘extremely high’ message volume.

Shares in the company have risen 29% over the past year. 

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