ADOBE'S HEADACHES

[DerVVulfman]

ADOBE'S NEW TERMS OF SERVICE
AREN'T THE PROBLEM...
ITS THE TRUST

(From DerVVulfman: This is as bad as the Unity Fiasco!)

by Jess Weatherbed

A recent notification from Adobe about a terms of service update caused outrage online once many people — forced to accept the new terms for continued access to its apps and services — interpreted it to mean Adobe was permitting itself free rein to access and use their work to train AI models

Specifically, the notification said Adobe had “clarified that we may access your content through both automated and manual methods” within its TOS, directing users to a section that says “techniques such as machine learning” may be used to analyze content to improve services, software, and user experiences. The update went viral after creatives took Adobe’s vague language to mean that it would use their work to train Firefly — the company’s generative AI model — or access sensitive projects that might be under NDA.

Adobe has now published a blog to address those concerns and assure its users that this isn’t the case. “Our commitments to our customers have not changed,” Adobe said in its statement, affirming that the company doesn’t train Firefly on customer content or assume ownership of a customer’s work. “Firefly generative AI models are trained on a dataset of licensed content, such as Adobe Stock, and public domain content where copyright has expired.”

A before and after comparison of the TOS update (which you can see below) shows that very little about the policy has actually changed. The inclusion of “machine learning,” particularly, while vague, isn’t new and has been present in the TOS for years. One explanation for this is that variations of AI technology that pre-date Firefly have long been used in tools like Photoshop’s Content-Aware Fill and Lightroom’s Select Subject. Confusingly, however, the updated language within the TOS has actually been live since February, with Adobe having only recently notified users of the change.

Adobe’s chief product officer, Scott Belsky, acknowledged on X that the wording within the notification is “unclear” and said the company’s legal team was working to address concerns about the vague language within the policy. “Adobe has had something like this in TOS for over a decade,” said Belsky. “But trust and transparency couldn’t be more crucial these days.”

Adobe has developed something of an “image” problem as it’s grown over the years, especially among individual creatives who no longer feel the company has their best interests at heart. It’s been criticized for dropping its one-time purchase model in favor of recurring subscriptions and accused of creating a monopoly over the creative software industry — which concerned regulators enough to effectively force the company to abandon its attempt to acquire Figma last year. While similar software is available from other brands like Affinity, Adobe’s is typically considered the “industry standard” and difficult to avoid using in professional environments.

Notably, Adobe has also developed a mountain of generative AI tools and services since introducing its own Firefly model in March 2023, enthusiastically promoting them as a means for people with limited creative experience to quickly produce content at scale. I imagine that sounds very attractive to businesses, but not so much to creative professionals who are anxious about their job security. It’s easy to see why so many feel betrayed by the company, especially when Adobe seemingly struggles to enforce the generative AI policies it introduced to protect them.

That breakdown of trust brings us here. While this viral drama surrounding Adobe’s TOS “update” may blow over, hoards of creatives are watching the company like a hawk. Adobe will have to find an effective way to address those trust issues if it wants independent creators, who have come to expect the worst from the company, to see it as the friend it claims to be rather than a foe.

[Mel]

Now, I am even more glad, I never used their software.

[DerVVulfman]

Adobe overhauls terms of service

to say it won’t train AI on customers’ work

The company will roll out new terms next week that clarify what it can and can’t do with its users’ data.

By  Jess Weatherbed

Adobe is overhauling the terms customers must agree to when using its apps in an effort to win back trust — and clarify that it won’t train AI on their work. The change, announced via a new blog post, comes after a week of backlash from users who feared that an update to Adobe’s terms of service would allow their work to be used for AI training.

The new terms of service are expected to roll out on June 18th and aim to better clarify what Adobe is permitted to do with its customers’ work, according to Adobe’s president of digital media, David Wadhwani.

“We have never trained generative AI on our customer’s content, we have never taken ownership of a customer’s work, and we have never allowed access to customer content beyond what’s legally required,” Wadhwani said to The Verge.

Adobe faced widespread scrutiny from creatives over the last week after its customers were alerted to language in its terms of service update that discussed AI. Customers interpreted Adobe’s vague language to mean the company was allowing itself to freely access and use customers’ work to train Adobe’s generative AI models. That wasn’t the case — and Adobe’s policies around training weren’t changing — but Adobe’s chief product officer, Scott Belsky, acknowledged that the wording was “unclear” and that “trust and transparency couldn’t be more crucial these days.”

Wadhwani says that the language used within Adobe’s TOS was never intended to permit AI training on customers’ work. “In retrospect, we should have modernized and clarified the terms of service sooner,” Wadhwani says. “And we should have more proactively narrowed the terms to match what we actually do, and better explained what our legal requirements are.”

A chunk of the creative community has long-standing beef with Adobe over its alleged industry monopoly, its subscription-based pricing models, and its use of generative AI. The company trained its own Firefly AI model on Adobe Stock images, openly licensed content, and public domain content to avoid some of the ethical concerns surrounding generative AI, but several
artists have found images that reference their work on Adobe’s stock platform — making it hard to trust the protections in place.

“We feel very, very good about the process,” Wadhwani said in regards to content moderation surrounding Adobe stock and Firefly training data but acknowledged it’s “never going to be perfect.” Wadhwani says that Adobe can remove content that violates its policies from Firefly’s training data and that customers can opt out of automated systems designed to improve the company’s service.

Adobe said in its blog post that it recognizes “trust must be earned” and is taking on feedback to discuss the new changes. Greater transparency is a welcome change, but it’s likely going to take some time to convince scorned creatives that it doesn’t hold any ill intent. “We are determined to be a trusted partner for creators in the era ahead. We will work tirelessly to make it so.”

[kyonides]

There's only one healthy conclusion to draw from these articles: they've already let AI process all of those works by now.
Let's be honest, they couldn't have gone too far developing AI stuff with just materials they had created themselves. Just as a not so long forgotten memory of my past once taught me, by the time people finally tells you they won't do something, they're already doing it.

For a large company or corporation to come up with the original announcement AFTER the facts and not before, it requires a certain level of confidence or even overconfidence to do that. Mainly because they've taking huge advantage of people's ignorance. They might not even be truly afraid of their customers' reaction. Especially if they're in charge of such a monopolistic empire.

What will be the next revelation to come in the next few years?
That they've sold all of their findings to the CCP?
Highly likely.

[DerVVulfman]

There's only one healthy conclusion to draw from these articles: they've already let AI process all of those works by now.
Let's be honest, they couldn't have gone too far developing AI stuff with just materials they had created themselves. Just as a not so long forgotten memory of my past once taught me, by the time people finally tells you they won't do something, they're already doing it.

That would be an incorrect legal assessment.

Yes, Adobe's recent TOS suggests it wants permission to all works, likely to permit scraping for AI scraping. But before these terms were present, Adobe had no such power and their clients/customers/users content is flatly and legally protected.

Were it discovered that Adobe had already begun the practice of AI data scraping of un-approved client content before these terms were in place, a severe class-action lawsuit for copyright violations would be filed. And if Adobe has begun this practice, they will have a lot of explaining to do.

[Remi-chan]

I've NEVER trusted adobe and I'm amazed anyone did or still does.

Them scalping for A.I. purposes was about the least surprising thing for them to do. Not many have done the legally correct thing but it is morally correct to pirate adobe products.

They will happily dick over their legitimate customers while the high seas offers a better edition of their bullshit free of adobe bridge and the numerous spyware, scalping programs and DRM they attach to their products.

Even most colleges and schools pretty much presume most of their students are going to have illegal copies of photoshop just purely because that's such a safer option in the grand scheme of things.

[kyonides]

There's one more thing to consider here. Just check what has occurred to other tech giants like Google and Apple, IIRC. They simply prefer to pay any fine imposed by any federal agency or the amount negotiated by victims during a settlement while still claiming they're not guilty and they're definitely not admitting any responsibility for committing any misdemeanors nor any actual crimes.  Right...

[DerVVulfman]

US sues Adobe for ‘deceiving’ subscriptions

that are too hard to cancel

Story by Emma Roth

The US government is suing Adobe for allegedly hiding expensive fees and making it difficult to cancel a subscription. In the complaint filed on Monday, the Department of Justice claims Adobe “has harmed consumers by enrolling them in its default, most lucrative subscription plan without clearly disclosing important plan terms.”

The lawsuit alleges Adobe “hides” the terms of its annual, paid monthly plan in the “fine print and behind optional textboxes and hyperlinks,” adding that the company fails to properly disclose the early termination fee incurred upon cancellation “that can amount to hundreds of dollars.”

When customers do attempt to cancel, the DOJ alleges that Adobe requires them to go through an “onerous and complicated” cancellation process. It then allegedly “ambushes” customers with an early termination fee, which may discourage customers from canceling in order to avoid the fee. The DOJ alleges this is a violation of federal laws to protect consumers.

The lawsuit also targets Adobe executives Maninder Sawhney, the senior vice president of digital go-to-market and sales, as well as David Wadhwani, the president of the company’s digital media business.

“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement. “Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel.”

In 2012, Adobe went from selling its creative software for lifetime use to charging users for a monthly or yearly subscription to its suite of products, including Photoshop, Illustrator, InDesign, and others. The company’s subscription model has long frustrated creatives, who are often forced to stay subscribed to Adobe in order to keep doing their jobs. Earlier this month, Adobe’s new terms of service were met with backlash after some interpreted the move as an opportunity to train its AI on users’ art.

The lawsuit speaks to continued regulatory scrutiny of Adobe. In 2022, Adobe attempted to acquire the product design platform Figma for $20 billion, but it abandoned the deal last year after facing antitrust scrutiny from European regulators.

CLICK HERE FOR FILED DOJ COMPAINT
Case 5:24-cv-03630 IN PDF FORMAT

[DerVVulfman]

Yesterday's posted article by Emma Roth from Verge.Com was still being reported. Today, the article had been completed, replete with a link to the DOJ's official complaint... all 26 pages!

[DerVVulfman]

Apologies for not keeping everyone abreast of developments. Doing normal searches, everything kept popping up with "Adobe to change their terms due to backlash" always dated around the 18th of June. News FOLLOWING was buried... Nice job, Google...

Adobe exec likened hidden cloud subscription exit fees to 'heroin', says FTC
Read the unredacted complaint against Photoshop giant and its software plans

Adobe's controversial billing practices and punitive fees for those terminating their subscriptions early follow from the software titan's addiction to revenue, the FTC has said.

In a newly unredacted [PDF] filing by the US watchdog in its lawsuit against the Photoshop maker, the FTC claims Adobe executives know its "inadequate ... disclosures" about its annual paid-monthly plans "harm and mislead consumers" but yet those execs "continue to engage in these unlawful practices because better disclosures would hurt Adobe's bottom line by reducing subscription revenues."

In other words, if Adobe was more upfront and clear about how its subscription plans truly worked, people would put away their wallets, and the biz would make less money, the FTC posits. One sticking point is the Illustrator giant's ETFs or early termination fees – what you have to pay to end an annual subscription before the year is out.

"As one Adobe executive admitted, the hidden ETF is 'a bit like heroin for Adobe' and 'there is absolutely no way to kill off ETF or talk about it more obviously [without] taking a big business hit,'" the regulator's complaint reveals.

Adobe disputes the FTC's allegations and has done so publicly. An executive who spoke to The Register on condition of anonymity – owing to the sensitive nature of public comment amid litigation – suggested the federal agency is simply cherry-picking provocative discovery material to prop up an otherwise deficient lawsuit. The individual who made the "heroin" comparison isn't on the executive team, we're told.

What's more, Adobe contends many of the business practices at issue have since been revised. The InDesign maker, which spells out its cancellation fees here and here at least, considers its subscription business model to be one that makes its software more widely available than it would be otherwise.

In June, the FTC sued Adobe alleging that the biz failed to adequately inform creative types about its subscription billing rules and the penalties charged for subscription cancellation during the signup process. The software house may disclose these details on its site, but they aren't made clear when being entered into, it is claimed.

The initial complaint [PDF] was substantially redacted. But on Tuesday, the judge overseeing the case denied Adobe's July 3 motion to keep portions of the complaint sealed – a request subsequently trimmed to cover just some financial information and executive address information (which was ultimately expunged).

Adobe's attorneys explained its reduced secrecy demand thus: "Adobe is not seeking to seal the vast majority of information redacted in plaintiff's complaint because that information is false and therefore does not require sealing under this court's precedent."

Even Adobe's diminished redaction request was met with skepticism by the government attorneys handling the FTC case. In their objection [PDF], the feds argued that the financial information Adobe sought to withhold is general, would not present any competitive harm if disclosed, and is less telling than the developer's own public financial reports.

Paragraph 30 in the FTC complaint – which Adobe had sought to conceal – reveals that the annual paid-monthly (APM) "plan accounts for most of Adobe's subscription revenues."

Adobe offers various software subscription options for its suite of creative applications. For its Creative Cloud All Apps subscription, as of May 2023, for example, Adobe presented three options: Annual, paid monthly ($54.99/month); Annual, prepaid ($599.88/year); and Monthly ($82.49/month). While the APM plan would seem to offer a monthly saving of $27.50 compared to the monthly plan, the fee for canceling the APM plan – potentially hundreds of dollars – would change that calculation. The fee is 50 percent of the remaining balance, so if you cancel with six months remaining, you would have to pay a penalty covering three months.

According to the FTC, Adobe designed its services to maximize those fees through interface design and other means. While APM revenue as a whole is material to Adobe, early termination fees arising from canceled APM subscriptions represent a very small portion of the app goliath's overall revenue.

In response to an inquiry from The Register about the information revealed in the unredacted complaint, Dana Rao, general counsel and chief trust officer at Adobe, said:

Providing consistent innovation through flexible subscription plans that fit different needs, timelines and budgets is the best way to serve millions of customers. We strongly disagree with this lawsuit's characterization of our business and we will refute the FTC's claims in court. The complaint is taking an offhand comment out of context from years ago, out of the tens of thousands of documents Adobe provided to the FTC. The early termination fees equate to minimal impact to our revenue, accounting for less than half a percent of our total revenue globally, but is an important part of our ability to offer customers a choice in plans that balance cost and commitment.

The crux of the case is that Adobe allegedly fails to properly explain to those purchasing annual software subscriptions, paid monthly, that customers will be charged a significant fee to terminate the subscription prematurely.

The FTC argues that Adobe's subscription practices violated the Restore Online Shoppers' Confidence Act (ROSCA), a US e-commerce law enacted in late 2010. ROSCA requires clear disclosure of terms and disallows, among other things, certain "negative option features" – such as treating consumer inaction as a sign of consent.

MORE CONTEXT

• Feds sue Adobe and execs for stinging subscribers with 'hidden' cancellation fees
  
• Adobe users just now getting upset over content scanning allowance in Terms of Use
  
• Canva acquires Affinity, further wounding a regulator-bruised Adobe
  
• Adobe's buy of Figma is 'likely' bad for developers, rules UK regulator
  

Adobe in a statement last month declared it would challenge the FTC's claims in court and insisted that it strives to have a positive customer experience. "We are transparent with the terms and conditions of our subscription agreements and have a simple cancellation process," said Rao at the time.

The newly revealed text sheds more light on the tactics Adobe is accused of using to keep customers paying for costly subscriptions. For example, the previously concealed paragraph 5 reads:

Adobe's misconduct does not stop with concealing key APM plan terms to maximize profits. Adobe utilizes other onerous cancellation procedures to trap consumers in subscriptions they no longer want. Consumers attempting to cancel online are forced to navigate numerous hurdles, including hidden cancellation buttons and multiple unnecessary steps such as pages devoted to password reentry, retention offers, surveys, and warnings. Consumers attempting to cancel via phone or chat experience dropped calls and chats, significant wait times, and repeated transfers. Adobe uses a dedicated 'Retention' team to discourage subscribers who try to cancel. Adobe relies on such obstacles to thwart cancellations and retain subscription revenues, depriving consumers of a simple mechanism to cancel as required by law.

Subsequent disclosed passages provide more detail about the alleged roles played by the two Adobe executives named in the case: Maninder Sawhney, senior vice president of digital go to market & sales, and David Wadhwani, president of digital media business.

The Register understands that Adobe considers the inclusion of these two executives to be mainly a way to make the case seem more substantial, since the complaint doesn't articulate any independent theory of liability. The California behemoth's position is that the two were simply doing their jobs.

Further on in the complaint, the newly revealed paragraph 53 contends that Adobe's enrollment flow – the sequence of web pages and interactions to subscribe – failed to display the terms and conditions for certain business and education customers, only presenting that information after payment had been made.

Other newly revealed passages include details about how folks perceive Adobe's practices – at least according to the FTC.

The previously hidden final sentence of paragraph 55 states: "The ETF and related confusion have been top drivers of customer support contacts, dissatisfied customers, and customer inquiry escalations at Adobe."

And paragraphs 57 and 58 claim the company and defendant executives have resisted external and internal pressure to remedy the situation "because Adobe has profited handsomely from these practices." It continues:

Defendants have also faced outside pressure to change their enrolment practices, including, for example, from a report that Forrester Research Inc released in May 2022, which found most consumers had difficulty trying to determine how much they would be forced to pay if they canceled a subscription. Defendants know that Adobe employees and executives have also internally expressed concern about consumer confusion and harm caused by Adobe's enrolment practices.

Further passages detail alleged efforts by Adobe to make it more difficult for customers to cancel subscriptions. And they also quote messages from customers, such as this email complaint sent to Adobe's CEO Shantanu Narayen:

I am desperate. I no longer know how to get help. I am writing for the umpteenth time … I have made written online requests galore, I have made four phone calls to Adobe's advertised phone numbers. I get no help online and no help by phone. Instead I spend an hour being transferred from one person to another and eventually being hung up on. … What does it take to cancel the subscription?

As the government's case proceeds, we may find out. ®