Adobe’s battle with US regulators is ending with a hefty price tag, after officials said some subscribers faced a maze of sign-up promises and a far less friendly route out.
The company has agreed to pay $75 million as the proposed deal moves toward court review. At the heart of this government lawsuit settlement were claims about hidden cancellation charges, and the pact will not take effect without federal court approval. No verdict, no trial for either side just yet
What federal regulators said Adobe hid from subscribers
In June 2024, the U.S. Justice Department and the Federal Trade Commission sued Adobe in federal court in San Jose, California. Regulators said buyers were funneled into an annual paid monthly plan while the price of leaving early was not shown clearly enough during checkout. Their filing said Adobe leaned on fine print disclosures, gave the monthly price more visibility than the cancellation terms, and left subscribers with a distorted picture of the deal and the fees that could run into hundreds of dollars.
The complaint also focused on what happened after a user tried to quit. According to the government, the online cancellation flow forced customers through repeated screens and prompts, while some callers met phone support resistance before an account was closed. Adobe later said it had made sign-up and cancellation more transparent, but it denied the allegations and any wrongdoing.
The settlement pairs a cash payment with free customer services
On Friday, Adobe said it had agreed to settle the case with a $75 million Department of Justice payment and another $75 million in free customer services, subject to court approval. The company said it was pleased to resolve the matter while denying wrongdoing and rejecting the government’s claims.
The financial backdrop explains why Washington pressed the case. Adobe said subscriptions made up 97% of its $6.4 billion in revenue for the quarter ended February 27, placing its subscription revenue share at the center of the dispute over cancellation fees and renewals. That scale gave the lawsuit weight beyond one checkout screen in San Jose. The agencies did not immediately comment after the settlement was announced, and the resolution still requires a judge’s sign-off before it takes effect.
