June 17 (UPI) — The federal government on Monday announced a civil enforcement lawsuit against software company Adobe and two company executives for alleged violations of the Restore Online Shoppers’ Confidence Act, known as ROSCA.
“Companies that sell goods and services on the Internet have a responsibility to clearly and prominently disclose material information to consumers,” U.S. Attorney Ismail Ramsey, for the Northern District of California, said.
The lawsuit brought by the Justice Department and Federal Trade Commission cites California-headquartered Adobe and David Wadhwani, the company’s president of Digital Media Business, and Maninder Sawhney, Adobe’s vice president of Digital Go to Market and Sales.
The lawsuit, filed in U.S. District Court for California’s Northern District, alleges the two had imposed a hidden “Early Termination Fee” on millions of Adobe subscribers that forced customers to navigate “a complex and challenging cancellation process designed to deter them from cancelling subscriptions they no longer wanted,” according to a Justice Department news release.
“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles,” said the FTC’s Bureau of Consumer Protection Director Samuel Levine.
The federal government is seeking an unspecified number of monetary civil penalties from the defendants, as well as a permanent injunction to prohibit it from engaging in future violations.
“Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel. The FTC will continue working to protect Americans from these illegal business practices,” Levine said.
Specifically, the lawsuit contends Adobe “systematically violated” ROSCA and profited “for years” 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 further alleges that Adobe had violated ROSCA by “failing to provide consumers with a simple mechanism to cancel their recurring, online subscriptions,” and that instead Adobe allegedly protected subscription revenue “by thwarting subscribers’ attempts to cancel, subjecting them to a convoluted and inefficient cancellation process filled with unnecessary steps, delays, unsolicited offers and warnings.”
Adobe now joins other companies such as Publishers Clearing House and Amazon in alleged violations of 2010’s Restore Online Shoppers’ Confidence Act.
The Federal Trade Commission alleged last year almost to the day as the Adobe complaint that Amazon had tricked customers into enrolling in its Prime subscription service and made it difficult to cancel subscriptions by abusing what the FTC called “dark patterns.”