Adobe will pay $75 million to settle a US cancellation fee lawsuit

Adobe says it will pay $75 million to resolve a lawsuit The US government has filed a lawsuit alleging that the creative software giant harmed consumers by intentionally making its subscriptions difficult to cancel and hiding termination fees.

Payment aims to solve the problem Complaint filed in June 2024in which the US Department of Justice accused Adobe of violating federal consumer protection laws by failing to properly disclose important terms of its “annual paid monthly” plans, and forcing Creative Cloud subscribers through a “cumbersome and complicated” cancellation process. The lawsuit said customers would then be “ambushed” with early termination fees — something an Adobe exec said “It’s a bit like heroin to Adobe“.

Adobe says it will also provide $75 million worth of free services to “affected customers” along with the payment it makes to the Department of Justice, subject to final court approval of the settlement. In its statement, Adobe denies any wrongdoing and says it has improved transparency around subscription terms and conditions, plan details, and cancellations in recent years.

“We have always prioritized giving our customers the flexibility to choose the plan that best fits their needs, schedule, and budgets. This includes offering multiple plan types where customers can choose between low initial costs and maximum flexibility,” Adobe said in a statement. “While we disagree with the government’s allegations and deny any wrongdoing, we are pleased to resolve this matter.”

This announcement comes shortly after Adobe CEO Shantanu Narain He revealed that he intends to step down after 18 years at the helm of the company, once a successor is chosen to replace him. Adobe pivoted from offering one-time purchase software licenses to subscription-only models under Narayen’s leadership. Now it’s up to the courts to decide whether Adobe’s settlement offer will get the green light — even though the current administration has already indicated a Fondness for hidden subscription fees.