Adobe has agreed to a $150 million settlement to resolve a U.S. government lawsuit that accused the company of making its subscriptions unnecessarily difficult to cancel. As per their statement, the agreement includes $75 million in civil penalties paid to the U.S. government and another $75 million worth of free services for affected customers.
The case stemmed from a 2024 lawsuit brought by the Department of Justice and the Federal Trade Commission over Adobe’s subscription practices. Regulators alleged that Adobe hid early termination fees and created complicated cancellation processes, violating the Restore Online Shoppers’ Confidence Act (ROSCA), which requires companies to clearly disclose subscription terms and provide straightforward cancellation options.
Why did regulators sue Adobe over its subscriptions?
The lawsuit focused primarily on Adobe’s “annual paid monthly” plans, which offer a discounted rate but require a year-long commitment. Authorities said the company failed to clearly disclose the early termination fee, which could amount to hundreds of dollars if users canceled early.
Regulators also claimed Adobe made it excessively difficult to cancel subscriptions by forcing customers through a complex series of steps, warnings, and offers. Thankfully, the settlement also requires Adobe to clearly disclose cancellation fees upfront, remind customers before free trials convert to paid plans, and provide simpler ways to cancel subscriptions going forward.
What does Adobe say about the settlement?
Adobe says the settlement closes the case but insists it didn’t do anything wrong. In a statement, the company said it remains committed to clearer subscription options and better transparency, and plans to contact eligible users about the $75 million worth of free services once the deal receives court approval.
Nonetheless, this episode also highlights how subscription models are facing increasing scrutiny. As more software companies rely on recurring plans, regulators are pushing for clearer pricing and easier cancellations. Hopefully, that means the days of “easy to subscribe, hard to cancel” may finally be numbered.