Adobe is under the regulatory spotlight as the Federal Trade Commission (FTC) launches an investigation following a wave of consumer complaints about the complexities of canceling app subscriptions, 9to5Mac reports.
This inquiry, disclosed by Adobe in a regulatory filing with the Securities and Exchange Commission (SEC), has drawn attention due to its potential impact on the company's operations and financial standing.
Reports Highlight Adobe's Complex Cancellation Process
The investigation, initiated in June 2022 and made public in November 2023, stems from consumer dissatisfaction with Adobe's subscription cancellation processes.
Users have voiced frustrations that it is simpler to initiate a subscription than to terminate it, with Adobe's cancellation policies drawing particular outrage.
Within the first two weeks, cancellations incur no penalty; however, consumers face prorated fees beyond this window. Furthermore, Adobe lacks an annual reminder system for renewals, leading some users to continue subscriptions they intended to end unwittingly.
Read Also: Tesla Is Recalling Almost All Vehicles Sold in the US - Here's Why
Adobe Responds
According to Bloomberg, Adobe acknowledged its cooperation with the FTC but maintained its belief that its practices align with the law.
However, the potential consequences loom large, including substantial financial costs or penalties, which could significantly impact the company's financial outcomes.
The investigation argues against broader discussions by the FTC regarding digital subscription regulations. The FTC's proposed rules, unveiled in March, emphasize simplifying the cancellation process to mirror subscription sign-ups.
This includes a mandate for companies to offer easy cancellation mechanisms and secure consumer consent before presenting additional offers during cancellation attempts.
President Joe Biden has supported these regulations, noting that simplifying cancellation processes can protect consumers from unnecessary financial burdens associated with unwanted subscriptions.
The FTC's focus on digital subscriptions has intensified, reflecting a growing concern for consumer protection. Companies like Adobe face scrutiny due to practices that can inadvertently lead consumers into continued subscription cycles, potentially incurring unexpected charges.
Adobe and Regulatory Probes
However, Adobe's legal entanglements don't end with the FTC investigation. The company is also navigating regulatory challenges concerning its proposed $20 billion acquisition of design software maker Figma Inc.
This includes disagreements with the UK's competition regulator and the looming specter of a potential lawsuit by the US Justice Department.
The repercussions of these investigations and regulatory hurdles have already started manifesting in Adobe's financial forecasts. Bloomberg reports that the company recently provided a fiscal year sales forecast that fell short of analyst estimates, leading to a decline in its share value in after-hours trading.
In Other News
Twitch has updated its sexual content policy and content classification system, allowing previously prohibited content such as illustrated nipples and "erotic dances."
This action follows a controversy known as the "topless meta," which was sparked by the ban of streamer Morgpie, known for streams that implied nudity without explicitly violating Twitch's policies.
"We want streamers to feel confident they understand our rules and viewers to feel confident they will get the experience they expect," the company said in a statement.
Stay posted here at Tech Times.
Related Article: Adobe Employees Given Until Dec. 8 to Get Vaccinated Or They'll Be Placed on Unpaid Leave
