Adobe has agreed a settlement totaling $150 million with the U.S. government. The Department of Justice had claimed that Adobe harmed consumers by hiding termination fees and making it hard to cancel subscriptions.
What was the U.S. government case?
The U.S. Department of Justice (DoJ) filed its complaint against Adobe back in June 2024. It alleged that Adobe had violated the Restore Online Shoppers’ Confidence Act (ROSCA). The DoJ accused Adobe of hiding the Early Termination Fee for the company’s Annual Paid Monthly subscriptions by using fine print and inconspicuous hyperlinks. These fees could be in the hundreds of dollars at times. The DoJ also claimed that Adobe made it difficult for subscribers to cancel. In particular, the DoJ cited “convoluted and inefficient cancellation processes filled with unnecessary steps, delays, unsolicited offers, and warnings.”
What has Adobe said?
In a statement on its website news page, Adobe confirmed that it had finalized a settlement agreement with the Department of Justice. However, the company stated, “While we disagree with the government’s claims and deny any wrongdoing, we are pleased to resolve this matter.” Adobe also claimed that it is “transparent with the terms and conditions of our subscription agreements, have a simple cancellation process and clearly disclose the details of our plans.” It went on to add, “In recent years, we have made our sign-up and cancellation processes even more streamlined and transparent.”
What next?
Court approval is required before the settlement is finalized. However, under the terms of the agreement, Adobe has to pay the DoJ $75 million in civil penalties. This money goes straight to the U.S. government.
In addition, Adobe agreed to provide $75 million worth of services for free to customers that qualify. The company says it will “proactively reach out to the affected customers” once the agreement is signed off by the courts. Craig H. Missakian, U.S. Attorney for the Northern District of California, stated, “Consumers should not have to navigate a digital maze to cancel a subscription. We will continue to hold responsible any company that uses deceptive business practices to harm the consumer.”
What we think
Adobe’s subscription model for its Creative Cloud suite of programs has not been popular with consumers since it was first introduced. There are some benefits with a subscription, such as getting regular updates to the latest version of a program. However, there is no option to buy lasting ownership of any copy of the software. This means that once you stop your payments, you lose all access to your previous work saved in Adobe’s file formats. With this case, the DoJ also alleged that Adobe made it difficult and expensive to get out of a subscription. While the company denies any wrongdoing, it has agreed to compensate affected consumers with free access to software. Hopefully at the end of the free period, consumers will find it easier to cancel without facing penalties.
