Adobe reaches $150m settlement on US lawsuit over alleged hidden subscription fees, cancellation charges

• Adobe's 2024 case soon to be closed, at the cost of a $150 million settlement
• Customers to get $75 million worth of free services as a result
• Adobe disagrees with allegations, but is pleased to close the case

The US Department of Justice has filed a proposed order to settle a lawsuit against Adobe and two of its execs – Maninder Sawhney and David Wadhwani – over alleged deceptive subscription practices.

The $150 million settlement is split equally into two parts – $75 million in civil penalties and a further $75 million worth of free services to customers.

The allegations (per the Department of Justice) claim Adobe's practices violated the Restore Online Shoppers’ Confidence Act (ROSCA), which "generally requires companies offering online subscriptions to clearly disclose important subscription information and to provide subscribers with simple ways to cancel".

Adobe's $150m settlement

The lawsuit alleges Adobe hit key subscription details, including early termination fees, using "fine print and inconspicuous hyperlinks." Early termination fees for Adobe's annual plans could reportedly reach hundreds of dollars.

Besides hiding some details, regulators also claimed that Adobe made cancellations difficult through complex processes, including multiple web pages, phone cancellations and delays.

Besides coughing up $150 million, Adobe must also clearly disclose early termination fees and how they're calculated before signup. The company has also been instructed to remind users before their free trials become paid plans, giving them simpler ways to cancel.

However, the settlement has not yet been confirmed and is awaiting court approval.

"American consumers deserve the right to make informed choices when deciding where to spend their hard-earned money," Assistant Attorney General Brett A Shumate wrote.

"While we disagree with the government’s claims and deny any wrongdoing, we are pleased to resolve this matter," Adobe added in a statement. "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."

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