- A federal judge has reversed his dismissal of a class action lawsuit against Adobe over its subscription practices.
- The lawsuit is one of several against Adobe over its alleged deceptive and confusing subscription cancellation process. Earlier this year, Adobe reached a $150 million settlement with the federal government.
Adobe’s legal battles over its subscription practices seem to be far from over.
The San Jose software giant settled with the US Federal Trade Commission (FTC) back in March for $150 million, a seemingly paltry amount compared to the $23.77 billion in revenue it generated last fiscal year. But a federal judge has reversed his earlier dismissal in a separate suit, allowing that class action case to move forward.
On March 31, U.S. Magistrate Judge Nathanael Cousins dismissed Marquez et al v. Adobe Inc., saying that the plaintiffs “did not sufficiently allege that they complied with the term of service’s pre-litigation requirements.”
The court reasoned that Adobe chose to ask the court to determine whether the class fulfilled its pre-litigation requirements instead of compelling arbitration, and in doing so acted inconsistently by giving up its right to enforce arbitration.
“After reconsideration, the court finds that defendant waived its right to compel arbitration as a whole and the opt-out provision did not prevent procedural unconscionability,” Cousins wrote. By vacating his March ruling, Cousins is allowing the class’s claims for conversion, unjust enrichment, and negligent misrepresentation to continue, but it can’t seek injunctive relief or disgorgement.
Essentially, plaintiffs can keep suing the maker of popular creative software for taking their money and enriching itself through hidden subscription fees. The plaintiffs can’t ask the court to stop Adobe from doing what it does, or take back any of the money it made from its shady subscription practices.
In his latest ruling, Cousins pointed to a clause in Adobe’s subscription where, if a user cancels after 15 days, they pay the developer of software such as Photoshop, Illustrator, and InDesign a 50% lump sum, while their subscription ends at the end of the month. This clause is only disclosed to the user if they click a link during checkout.
Cousins wrote, “This is the first and only instance where the early termination fee is explicitly linked to the total contract value. The process for cancellation is designed to be confusing and frustrating.”
The fight over alleged deceptive subscription practices isn’t confined to the US. In May, similar suits were filed against Adobe in Canada.
