Adobe has agreed to a $75 million settlement with the US Department of Justice to resolve a 2024 lawsuit alleging that the company made it hard for customers to cancel subscriptions. The deal includes another $75 million in free services for qualifying customers. Adobe denies any wrongdoing but says it has improved its processes.
The US Department of Justice (DOJ) and Federal Trade Commission (FTC) filed a joint complaint against Adobe in 2024, accusing the software company of violating consumer protection laws. The allegations centered on Adobe's practices for its Creative Cloud subscriptions, which include tools like Photoshop and Illustrator. Customers reportedly faced hidden early termination fees—equal to 50 percent of the remaining subscription term, often hundreds of dollars—for canceling annual plans paid monthly before the first year ended. The complaint also highlighted obscured disclosures, labyrinthine phone systems that dropped calls or transferred users endlessly, and enrolling users in lucrative plans without clear terms, potentially breaching the Restore Online Shoppers’ Confidence Act of 2010.
Adobe transitioned to a subscription model in 2013, replacing perpetual licenses that cost $700 to over $2,600 for its Creative Suite 6. While monthly fees of $10 to $70 seemed affordable initially, long-term costs added up, leading to cancellation frustrations.
Under the settlement announced on March 13, 2026, Adobe will pay $75 million to the DOJ and provide $75 million in free services to affected customers, such as those who paid termination fees. "While we disagree with the government’s claims and deny any wrongdoing, we are pleased to resolve this matter," Adobe stated. The company plans to proactively contact qualifying customers after court filings and approvals. It also claims to have streamlined subscription sign-ups and cancellations, including refunds within 14 days of purchase.
"The Justice Department will strongly oppose any attempt to harm Americans with deceptive and unfair business practices," said Assistant Attorney General Brett Shumate in a DOJ statement.
The settlement comes shortly after Adobe CEO Shantanu Narayen, who led the shift to subscriptions over 18 years, announced his retirement, with his stock dipping briefly post-Q1 earnings. Adobe's subscription revenues continue to grow, exceeding $7 billion in net profit last year.
