Competition watchdog cracks knuckles, probes legality of Adobe cancellation fee

Summary

Britain’s competition watchdog is opening an investigation into Adobe’s early cancellation fees on membership plans to ascertain if it breaks competition law. Under its terms, Adobe says customers that cancelled its "annual billed monthly" subscription after more than two weeks are subject to a cancellation fee equating to 50 percent of the yearly cost. After they end the plan, the user only has access to the software until the close of that month’s billing period. The Competition and Markets Authority says it will examine if these terms are unfair and whether customers get "clear and timely information upfront" about these fees that could influence their buying behavior. "From students to content creators, millions of people rely on digital design tools - and they should feel confident that businesses selling these services play by the rules," said Emma Cochrane, Executive Director for Consumer Protection at the CMA. "Our investigation will consider whether Adobe customers are getting a fair deal and if they have enough information upfront about the cancellation fee," she added. The CMA probe comes hot on the heels of Adobe's $75 million settlement with the US DoJ to resolve allegations over hidden cancellation fees. The company, which denied wrongdoing, must also provide some customers with around $75 million in free services to resolve accusations its subscription practices violated the US's Restore Online Shoppers' Confidence Act. Over in the UK, Adobe is the ninth business to be probed under the direct consumer enforcement powers, allowing the British watchdog to rule on breaches of the law rather than going to court. The CMA can impose fine on corporations of up to ten percent of global turnover, and it can also penalize businesses for concealing evidence or providing false information. The CMA says it has "reached no conclusions about whether Adobe has broken the law." The digital design sector is worth almost £60 billion, or roughly 2.7 percent of the UK eco...