Adobe to pay $75M cash and $75M in free services over subscription suit
Adobe agreed to pay $75M to the US Justice Department and provide $75M in free services to settle its DOJ and FTC lawsuit over hard-to-cancel subscriptions and termination fees. The company says it has streamlined its subscription processes and the deal awaits court approval as CEO Shantanu Narayen will retire.
1. Settlement Details
Adobe agreed to resolve a 2024 lawsuit by paying $75 million to the US Justice Department and granting $75 million in free subscription services to affected customers. The settlement addresses allegations that the company’s cancellation process obscured early termination fees for annual plans paid monthly.
2. Allegations and Lawsuit
The DOJ and FTC alleged that Adobe deliberately made it difficult for customers to cancel subscriptions and failed to disclose the substantial termination fees required to exit discounted annual plans. The joint complaint highlighted the financial burden on users who canceled after the initial 14-day refund window.
3. Subscription Process Improvements
In response, Adobe says it has simplified both signup and cancellation procedures, offering full refunds within 14 days of purchase and clearer fee disclosures thereafter. The company’s updated support documentation outlines streamlined steps for managing and terminating plans.
4. Next Steps and Leadership Transition
The proposed settlement requires court approval before it becomes effective. The agreement coincides with the planned retirement of CEO Shantanu Narayen, who has led Adobe’s shift to a subscription-based model over the past 18 years.