Adobe Settles $75 Million Lawsuit Over Difficult Subscription Cancellations
Adobe has agreed to pay the US government $75 million to settle a lawsuit concerning the company's allegedly unfair subscription practices. The lawsuit was filed in 2024 by the US Department of Justice and the Federal Trade Commission, accusing the company of deliberately making it difficult to cancel subscriptions and obscuring information about expensive early termination fees for annual plans paid monthly.
Adobe, for its part, stated that it "disagrees with the government’s claims and denies any wrongdoing," yet is "pleased to resolve this matter." As part of the agreement, the company will provide $75 million worth of free services to eligible customers and pay an additional $75 million to the Department of Justice. Furthermore, Adobe claims to have already made the processes for signing up and canceling subscriptions "more streamlined and transparent."
A key point of the complaint was the accusation that canceling an annual plan, paid monthly, before completing the first year of service required customers to pay an early termination fee, compensating for initial discounts. Currently, Adobe offers refunds for subscriptions within 14 days of signing up, but after this period, canceling an annual plan paid monthly incurs a significant fee.
Although Adobe's proposed settlement still needs court approval, the timing is notably ironic. Shantanu Narayen, Adobe's CEO for the past 18 years and the executive who oversaw the company's transition from a traditional software sales model to a Software-as-a-Service (SaaS) model, recently announced his retirement.
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