Adobe has agreed to a $150 million settlement to resolve a U.S. government lawsuit that accused the company of making it unnecessarily difficult to cancel subscriptions. The agreement includes $75 million in civil penalties to be paid to the U.S. government and $75 million in additional free services for affected customers, according to a statement.
The case stems from a lawsuit filed in 2024 by the Justice Department and the Federal Trade Commission challenging Adobe’s subscription practices. Regulators alleged that Adobe violated the Restore Online Shoppers’ Confidence Act (ROSCA), which requires companies to clearly disclose subscription terms and provide simple cancellation options by hiding early termination fees and creating a complicated cancellation process.
Why did regulators sue Adobe over subscriptions?
The lawsuit primarily focused on Adobe’s “Pay Annually Monthly” plan, which offers discounted rates but requires a one-year commitment. Authorities said the company did not clearly disclose early termination fees, which could amount to hundreds of dollars if users cancel early.
Regulators also alleged that Adobe made it overly difficult to cancel subscriptions by forcing a complex series of steps, warnings and offers on customers. Fortunately, the settlement requires Adobe to clearly disclose cancellation fees, remind customers before free trials are converted to paid plans, and provide simpler ways to cancel subscriptions going forward.
What does Adobe say about the settlement?
Adobe claimed that although this settlement closed the case, it had done nothing wrong. In a statement, the company said it is committed to clearer subscription options and better transparency and plans to contact eligible users about $75 million worth of free services once the deal receives court approval.
Nonetheless, this episode highlights how subscription models are coming under increasing scrutiny. As more software companies rely on recurring plans, regulators are demanding clearer pricing and easier cancellation. Hopefully, this means that the era of “it’s easy to subscribe, but it’s hard to cancel” is finally here.