US regulators are scrutinizing Adobe’s subscription practices, possibly resulting in significant penalties for breaching the Restoring Online Shopper Confidence Act (ROSCA) enacted in 2023. The Federal Trade Commission (FTC) initiated an inquiry into Adobe’s fee imposition for canceling service subscriptions, aligning with prior complaints lodged against Amazon for ROSCA violations.
Impact on Adobe’s Financial Landscape
In a recent Form 8-K filing with the Securities and Exchange Commission (SEC), Adobe acknowledged FTC’s investigation: “Since June 2022, we have cooperated with the FTC’s civil investigation request regarding our disclosure and unsubscription practices under ROSCA.” FTC staff, in November 2023, signaled potential consent negotiations, aiming to settle the matter. Despite Adobe’s assertion of compliance, the company anticipates significant financial repercussions if found guilty, citing potential monetary penalties impacting financial outcomes.
As of the 2023 fiscal year-end, Adobe’s revenue stood at $19.41 billion with an operating profit of $6.65 billion, adds NIX Solutions. The ongoing investigation casts uncertainty over Adobe’s financial outlook, prompting cautious engagement with the FTC to address compliance concerns while potentially mitigating adverse impacts on its operations and financial standings.