Adobe will pay $150 million in a lawsuit over subscription cancellation fees for Photoshop and other programs

Adobe agreed to pay $150 million as a settlement of litigation with U.S. authorities

What happened
- The claim:

In June 2024 the U.S. Department of Justice and the Federal Trade Commission accused Adobe of hiding termination fees for its annual subscription plans paid monthly. These fees sometimes ran into several hundred dollars, but the disclosure was in fine print or only available by clicking a hyperlink.

- Simplifying cancellation:

Plaintiffs alleged that Adobe made it difficult to opt out of services. To cancel a subscription consumers had to navigate through multiple web pages and speak with several company representatives over the phone, causing “resistance and delays.”

- Legal context:

Adobe’s conduct was viewed as a violation of the Online Consumer Trust Restoration Act (2010) – a law that prohibits charging for automatic renewal without clear disclosure and customer consent.

What followed
- Settlement:

Adobe agreed to pay $75 million in fines and provide customers with free services equal to the same amount. The total settlement will be $150 million (half as a fine, half as compensation).

- Terms of the agreement:

Court approval is required for it to take effect.

- Dropping charges against executives:

As part of the settlement, U.S. authorities will also drop accusations against two Adobe executives.

Reactions
Side Commentary
Department of Justice Highlighted that consumers must be able to make an informed choice about how they spend their money.
Adobe Stated that in recent years it has simplified registration and cancellation processes, making them more transparent. The company remained unconvinced by the allegations but acknowledged the importance of resolving the issue.

Financial context
- In the last quarter 97 % of Adobe’s revenue came from subscriptions, amounting to $6.4 million.

Thus, Adobe is concluding its dispute with the U.S. government by paying a fine and compensating customers while asserting its efforts to improve service transparency.