Adobe Ends Federal Subscription Lawsuit With $150 Million Settlement Package

Adobe has settled a Justice Department lawsuit by agreeing to provide $75 million worth of free services to eligible customers and paying $75 million to the Justice Department, the company said in a Friday (March 13) statement.

The lawsuit, which was filed in June 2024, alleged that Adobe deceived customers by hiding an early termination fee on a subscription plan and making it difficult for customers to cancel their subscriptions, PYMNTS reported at the time.

Adobe said in its Friday statement that it disagrees with the government’s claims and denies any wrongdoing but is pleased to resolve the matter.

“We are transparent with the terms and conditions of our subscription agreements, have a simple cancellation process and clearly disclose the details of our plans, which we carefully crafted to maximize value and benefits to our customers,” the company said. “In recent years, we have made our sign-up and cancellation processes even more streamlined and transparent.”

When the Justice Department and the Federal Trade Commission (FTC) announced the complaint in June 2024, they said they alleged that Adobe had violated the Restore Online Shoppers’ Confidence Act (ROSCA).

The agencies alleged that the company used fine print and inconspicuous hyperlinks to hide information about its subscription plans, including an “early termination fee” that customers could be charged when they cancel their subscriptions.  They alleged that Adobe imposed this fee on millions of online subscribers and profited from it for years.

The Justice Department and FTC also alleged that Adobe forced subscribers to navigate a “complex and challenging” cancellation process designed to deter them from cancelling their subscriptions. They alleged that this violated a ROSCA rule that requires companies to provide consumers with a simple mechanism to cancel online subscriptions.

The lawsuit sought consumer redress and monetary civil penalties as well as a permanent injunction to prohibit future violations, the agencies said in a June 2024 press release.

Adobe said at the time that it would refute the claims in court. In a June 2024 statement, it said: “Our priority is to always ensure our customers have a positive experience. We are transparent with the terms and conditions of our subscription agreements and have a simple cancellation process.”