Adobe Agrees To Pay $75M After DOJ Says Adobe Hid Cancellation Process, Trapped Subscribers

Adobe has agreed to pay $75 million to the US Department of Justice and to provide an additional $75 million in free services to affected customers to resolve a federal lawsuit that accused the company of making it difficult for subscribers to cancel and of obscuring termination fees.

““Adobe’s mission is empowering everyone to create”

Adobe Newsroom

The settlement was presented as a resolution to the government’s case and will require court approval before it is finalized.

Adobe Newsroom

Adobe said it disagrees with the government’s claims but is moving forward to resolve the matter.

The government complaint, filed in June 2024 following an FTC recommendation, targeted Adobe’s “annual paid monthly” subscription model and said the company buried termination fees and material terms in fine print or behind links and text boxes.

Regulators alleged the company enrolled consumers into its default, most lucrative plan without clearly disclosing important plan terms, and described early termination fees as being obscured or hidden from customers during sign-up.

CNET

Regulators and reporting described the cancellation experience as deliberately difficult, with customers being "ambushed" by surprise early termination fees and forced through an "onerous and complicated" cancellation flow; some reports say fees could amount to roughly half of the remaining contract value.

“Adobe has agreed to pay $75 million to settle a lawsuit brought by the US government that accused the company of making it difficult for customers to cancel its subscriptions and failing to clearly disclose termination fees”

Dexerto

Complaints included examples of phone calls being dropped or endlessly transferred when users tried to cancel, and filings portrayed user-interface choices as dark patterns that trapped subscribers.

Adobe said it disagrees with the government's claims, denied wrongdoing, and framed the settlement as a way to resolve the dispute while noting the company has taken steps to streamline sign-up and cancellation processes; Adobe also said it will proactively reach out to qualifying customers once court filings are in place.

The company emphasized giving customers flexibility in choosing plans while maintaining that it will comply with the settlement terms if the court approves them.

Engadget

Observers noted the case’s potential industry implications at a time when Adobe is heavily dependent on subscription revenue and amid leadership change; subscriptions accounted for 97% of Adobe’s $6.4 billion in quarterly revenue, and the settlement was announced a day after CEO Shantanu Narayen said he will step down after more than 18 years.

“PCMag editors select and review products independently”

PCMag

Some outlets suggested the case could reshape how software-as-a-service companies handle cancellations and visible disclosure of material terms.

The Economic Times