Adobe has agreed to pay $75 million to the US government to settle its lawsuit over the company’s alleged harmful approach to subscriptions. The lawsuit began in 2024, when the U.S. Department of Justice and the Federal Trade Commission filed a joint complaint alleging that the company deliberately made it difficult to cancel subscriptions and often required customers to pay expensive “early termination fees” to opt out of annual subscriptions that were paid monthly.
“While we disagree with the government’s claims and deny any wrongdoing, we are pleased to resolve this matter,” Adobe writes. “We have agreed to provide $75 million worth of pro bono services to eligible customers. We will proactively reach out to affected customers once the appropriate filings are made and accepted by the Court. Additionally, we have agreed to pay $75 million to the Department of Justice.”
Adobe’s statement also said it has made the process of signing up for and canceling subscriptions “more streamlined and transparent.” A key point of the original complaint is that canceling an “annual plan, monthly payments” subscription before completing the first year of service requires customers to pay an early termination fee to make up for the value Adobe has lost by initially offering its software at a discount. Adobe currently allows refunds for plans if canceled within 14 days of signing up, but canceling an “Annual Plan, Pay Monthly” subscription after the first 14 days incurs a hefty fee (as explained in the company’s detailed support page).
A court must approve Adobe’s proposed settlement before the lawsuit can be fully resolved, but the timing is at least a little ironic. Shantanu Narayan, CEO of Adobe for the past 18 years and the executive who oversaw the company’s transformation from a traditional software business to a software-as-a-service business, recently announced plans to retire.
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