Adobe disclosed that it might face "significant monetary costs or penalties" following the US Federal Trade Commission probe into its subscription cancellation practices.
The software company said in a filing this Wednesday that it a possible settlement with regulators for supposed violation "relative to the Restore Online Shoppers' Confidence Act."
Adobe has been working with FTC since the commission launched its civil investigation in June last year.
Many users have long complained about the high expenses that entail canceling an Adobe subscription. Users are only given 14 days to cancel their subscription to get a full refund.
Failure to cancel within two weeks will result in the payment becoming non-refundable and "your service will continue until the end of that month's billing period."
An Adobe Creative Cloud subscription, which includes Photoshop and After Effects, can rack up to $700 per year.
FTC Investigations on Digital Subscriptions
Digital subscription services have become the recent focus of FTC policies this year.
The commission proposes that consumers must be able to cancel subscriptions as easy as signing up, preventing from "wasting Americans' time and money on things they may not want or need," said President Joe Biden.
Adobe noted that the FTC already contacted the company in November that it "has the authority to enter into consent negotiations to determine if a settlement" can be reached.
The software suite is also working with the commission to smooth out its $20 billion proposed acquisition of design software studio Figma.
Adobe Earnings for 2023 Show Positive Net-Income
The outcome of the FTC investigation came after Adobe reported $5.05 billion in revenue in the last quarter of the year, 12% higher than last year's.
Company executives expect Adobe's "world-class margins" to continue in the first quarter of 2024, predicting a $5.1 and $5.15 billion gross.
The company aims to close 2024 with an annual revenue of $21.3 billion.
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