FTC has some questions for Adobe
What's happening
The Federal Trade Commission (FTC) has some questions for Adobe regarding its Creative Cloud subscriptions.
Why it is important
While many experts describe the current stage of the subscription industry as "subscription fatigue", some businesses are trying to optimize their subscription flows and increase customer lifetime value. Customers are not always happy about these tricks and it can result in complaints and chargebacks.
Zoom in
The main FTC complaint for Adobe is about the "annual paid monthly" subscription plan. If the customer decides to cancel their subscription after several months they will be charged annual termination fees.
In addition, the "annual paid monthly" $59,99 price is displayed on the main pricing page and selected by default which can be misleading to the person who didn't read the fine print.
Regular monthly plans are available for full Creative Cloud subscriptions, but they are not available for some limited subscriptions like for photographers only.
To be fair
The "annual paid monthly" plan ($59.99) is significantly cheaper than the monthly plan ($89.99) for the full Creative Cloud. The "annual paid monthly" plan is a great option for customers who intend to use the product for an extended period and want to save.
Bigger picture
Merchants implement various features to enhance their subscription services. There are several tools to optimize subscriptions, for example:
Free trials
Gradual pricing increases
Dunning campaigns
Monthly or annual plans
Subscription pausing
Cancellation processes
Automatic payment method updater
However, some businesses find it challenging to strike a balance between achieving their business objectives and maintaining transparency.
What's next
FTC just sent a strong message to the industry about treating customers fairly. We are still awaiting a public response from Adobe.
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