The Competition and Markets Authority (CMA) has launched an
investigation into Adobe following concerns that early
cancellation fees on membership plans for certain products may
breach consumer protection law.
Customers who cancel more than 14 days after signing up to its
‘annual billed monthly' plan – where they agree to a yearly
contract and pay monthly – must pay 50% of the remaining yearly
cost. After they cancel, customers will have access to the
product until the end of that month's billing period.
The investigation will examine whether these terms are unfair and
if customers are given clear and timely information upfront about
the early cancellation fees, which are likely to influence
their decision to purchase the
product.
Adobe's products – including Photoshop, Illustrator and Adobe
Premiere – are widely used by consumers to create and edit
content such as photographs and videos.
At this stage, the CMA has reached no conclusions about whether
Adobe has broken the law.
Emma Cochrane, Executive Director for Consumer Protection at the
CMA, said:
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.
Our investigation will consider whether Adobe customers are
getting a fair deal and if they have enough information upfront
about the cancellation fee.
This is the ninth business the CMA is investigating under its new
direct consumer enforcement powers.
These powers allow the CMA to determine whether consumer law has
been breached – rather than going through the courts. The CMA can
also take direct action where it finds wrongdoing such as
securing redress for consumers and imposing fines on companies
where appropriate.
How the investigation unfolds will depend on the nature of the
evidence obtained. The investigation may result in a finding of
unlawful conduct, the imposition of remedies, or closure of the
case.
Further information about the investigation can be found on the
CMA's website.
Notes to editors:
- According to the Design
Council, the digital design sector is worth nearly £60
billion, equivalent to 2.7% of the UK economy. Digital design
grew in the UK by 138% between 2010 and 2019, becoming the
largest and fastest growing area of design.
- Under the CMA's new direct consumer enforcement powers, if a
company infringes consumer protection law, the CMA can fine them
up to 10% of their global turnover.
- Failure to provide information when requested (without a
legitimate reason), concealing evidence, or providing false
information can likewise result in a fine, with penalties of up
to 1% of a business' global turnover and additional daily
penalties.
- The government consulted on changes to
the legislative framework for subscription contracts under
the Digital Markets, Competition and Consumers Act 2024. The
CMA's investigation is separate to this consultation and draws
on existing and established legislation relating to unfair
contract terms and misleading omissions.
- Further details about Adobe's subscription and cancellation
terms can be found on their website.
