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.
The complaint was filed in June 2024 by the US Department of Justice, which alleged that the creative software giant violated federal consumer protection laws through the way it marketed and managed its Creative Cloud subscription plans.
According to the lawsuit, Adobe’s “annual paid monthly” plans did not properly disclose key terms, while customers attempting to cancel their subscriptions were forced through what the government described as an “onerous and complicated” process.
The DOJ also claimed that some customers were “ambushed” with early termination fees after trying to cancel their plans. In the complaint, one Adobe executive was quoted as describing the fees as “a bit like heroin for Adobe.”
Adobe says the settlement will resolve the case if it receives final court approval. The company will pay $75 million and also provide $75 million worth of free services to customers who were affected.
Unsplash: farhat099Adobe denies wrongdoing while agreeing to settlement
In a statement, Adobe said it disagrees with the allegations but is moving forward with the settlement to resolve the matter.
“We have always prioritized giving our customers the flexibility to choose the plan that best fits their needs, timeline, and budgets. This includes offering multiple types of plans where customers can choose between lower upfront costs and maximum flexibility,” the company said.
“While we disagree with the government’s claims and deny any wrongdoing, we are pleased to resolve this matter.”
Adobe also said it has made changes in recent years to improve transparency around subscription terms, plan details, and cancellation processes.
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The settlement comes shortly after Adobe CEO Shantanu Narayen announced plans to step down from the role after leading the company for 18 years. Narayen said he will remain in the position until a successor is selected.