Adobe Settles U.S. Case Over Subscription Fees
Adobe has agreed to pay $75 million to resolve a U.S. government lawsuit accusing the company of misleading customers about subscription cancellation fees and making it difficult to cancel its services. The settlement was announced Friday and still requires court approval.
The San Jose, California–based software giant, known for products such as Photoshop and Acrobat, will also provide an additional $75 million in free services to customers as part of the agreement with the U.S. Department of Justice.
Allegations Over Hidden Fees and Difficult Cancellations
The lawsuit was originally filed in June 2024 by the Department of Justice and the Federal Trade Commission. Regulators alleged that Adobe concealed costly termination fees tied to its popular “annual paid monthly” subscription plan.
According to the complaint, these cancellation fees—sometimes reaching hundreds of dollars—were buried in fine print or hidden behind hyperlinks and text boxes during the sign-up process. Authorities argued that customers were not clearly informed about these charges before subscribing.
Regulators also claimed Adobe made it unnecessarily difficult for users to cancel subscriptions. Customers attempting to cancel online reportedly had to navigate multiple pages before completing the process. Those calling customer service were said to repeat cancellation requests to multiple representatives and face delays or resistance.
Alleged Violation of Consumer Protection Law
The U.S. government accused Adobe of violating the Restore Online Shoppers’ Confidence Act (ROSCA), a 2010 consumer protection law. The law requires companies to clearly disclose all material terms of subscriptions and obtain customer consent before charging fees, including for automatic renewals.
Authorities argued Adobe’s subscription practices failed to meet these requirements, potentially harming consumers who unknowingly agreed to cancellation penalties.
Adobe Denies Wrongdoing
In a statement published on its website, Adobe said it disagrees with the government’s allegations but chose to settle the case.
“While we disagree with the government’s claims and deny any wrongdoing, we are pleased to resolve this matter,” the company said.
Adobe also noted that it has updated its subscription sign-up and cancellation processes in recent years to improve transparency and make them easier for customers.
Subscriptions Dominate Adobe’s Revenue
The case comes as subscription services remain central to Adobe’s business model. The company reported that subscriptions accounted for 97% of its $6.4 billion revenue for the quarter ending February 27.
The settlement announcement also follows leadership changes at the company. Just a day earlier, Adobe revealed that Chief Executive Officer Shantanu Narayen plans to step down after more than 18 years leading the company.
Meanwhile, Adobe’s stock has declined this year amid growing investor concerns about how artificial intelligence could impact the company’s long-term business outlook.
The Department of Justice and the Federal Trade Commission have not yet issued official comments on the settlement.
