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The US tech industry has seen a flurry of significant developments over the past month, with leading companies facing both challenges and opportunities. Let's EDUTO explore some stories that highlighted tech in America during June 2024:
Apple Discontinues Buy Now, Pay Later Service
In a surprising move that sent shockwaves through the fintech world, tech giant Apple announced plans to shut down its "Buy Now, Pay Later" (BNPL) service in the US by the end of 2024. The company cited increasing regulatory scrutiny of the BNPL industry as a key factor behind its decision.
Over the past year, consumer protection advocates and lawmakers have raised growing concerns about the potential risks associated with these short-term financing options. Critics argue that BNPL plans can lead to overspending, late fees, and debt traps, particularly among young and financially vulnerable consumers. Regulators have begun taking a closer look at BNPL providers' data collection and underwriting practices.
Facing this heightened regulatory environment, Apple determined that continuing to offer its own BNPL service was no longer viable. Instead, the company will focus on launching a new proprietary loan program in 2025, which it promises will have more robust consumer safeguards built in.
US Sues Adobe Over Subscription Disclosures
In another blow to a major tech firm, the US Department of Justice filed a lawsuit against software company Adobe, accusing it of failing to adequately disclose information about its subscription plans to consumers.
The U.S. government is suing Adobe, the maker of Photoshop and other design software, accusing the company of trapping customers into year-long subscriptions through hidden early termination fees and making it overly difficult to cancel.
The Federal Trade Commission (FTC) alleges that Adobe buries these hefty termination fees, sometimes reaching hundreds of dollars, in fine print or behind hyperlinks and text boxes within the terms of its "annual paid monthly" subscription plans. The lawsuit claims Adobe calculates these early cancellation fees as 50% of the remaining subscription payments.
Additionally, the FTC alleges Adobe forces subscribers who want to cancel online to navigate through numerous pages, while those canceling by phone are often disconnected, forced to repeat themselves to multiple representatives, and encounter "resistance and delay" from those representatives.
Adobe has disputed the claims, stating it is "transparent with the terms and conditions of our subscription agreements and have a simple cancellation process." However, the FTC asserts that Adobe has trapped customers through these hidden fees and onerous cancellation procedures, violating the Restore Online Shoppers' Confidence Act.
The U.S. government is seeking to hold Adobe and two of its executives accountable for these alleged practices that make it difficult for customers to cancel their subscriptions.
These two high-profile developments in June 2024 underscore the growing pains and challenges facing the US tech industry. Companies must navigate an evolving regulatory landscape while also adapting to shifting consumer preferences and advancing technologies. As we move into the second half of the year, tech firms will need to demonstrate a keen awareness of their societal impact and a commitment to responsible innovation.
