The Competition and Markets Authority (CMA) has launched an investigation into Adobe related to concerns that early cancellation fees on membership plans for certain products may breach consumer protection law. Adobe’s products, like Photoshop, Illustrator and Adobe Premiere, are widely used by consumers to create and edit content such as photographs and videos.
Consumers who cancel more than 14 days after signing up to its ‘annual billed monthly’ plan, must pay 50% of the remaining yearly cost. After cancellation, customers have access to the product until the end of that month’s billing period.
The CMA’s investigation will examine whether these terms are unfair and if customers are given clear and timely information upfront about early cancellation fees, which may influence their purchasing decisions.
Currently, the CMA has not reached any conclusions about whether Adobe has broken the law. Adobe is the ninth business being investigated by the CMA under its direct consumer enforcement powers under the Digital Markets, Competition and Consumers Act 2024. These allow the CMA to determine whether consumer law has been breached. The CMA may also take direct action where wrongdoing is found, such as securing redress for consumers and imposing fines on businesses.
The CMA’s investigation into Adobe is separate to the government’s consultation on changes to the legislative framework for subscription contracts under the Digital Markets, Competition and Consumers Act 2024. The investigation draws on existing and established legislation relating to unfair contract terms and misleading omissions. The CMA recently consulted on draft guidance about unfair contract terms and we are waiting for the final outcome.
