Adobe agrees to pay settlement for making its subscriptions hard to cancel

Adobe has agreed to pay the US government $75 million to settle its lawsuit over the company’s allegedly harmful approach to subscriptions. The suit started in 2024, when the US Department of Justice and the Federal Trade Commission filed a joint complaint alleging the company deliberately made it difficult to cancel subscriptions and obscured the frequently expensive “early termination fee” customers have to pay to get out of annual subscriptions that are paid monthly.

“While we disagree with the government’s claims and deny any wrongdoing, we are pleased to resolve this matter,” Adobe writes. “We have agreed to provide $75 million worth of free services to customers that qualify. We will proactively reach out to the affected customers once the appropriate filings with the Court are made and accepted. Additionally, we have agreed to a $75 million payment to the Department of Justice.”

Adobe’s statement also notes that it’s made the process of both signing up for and canceling subscriptions “more streamlined and transparent.” A major sticking point of the original complaint is that canceling an “annual plan, paid monthly” subscription before completing the first year of service required customers to pay an early termination fee to make up for the value Adobe lost initially offering its software at a discount. Adobe currently allows plans to be refunded if they’re canceled within 14 days after signing up, but canceling an “annual plan, paid monthly” subscription after those first 14 days requires paying a hefty fee (as outlined in the company’s detailed support page).

A court will have to approve Adobe’s proposed settlement before the lawsuit can be totally resolved, but the timing is at least a little ironic. Shantanu Narayen, Adobe’s CEO for the last 18 years and the executive who oversaw the company’s transition from traditional software business to software-as-a-service business, recently announced plans to retire.