Adobe has agreed to pay $150 million to settle a lawsuit in which federal regulators accused the software company of hiding costly subscription fees and making it difficult for customers to cancel their plans.
Adobe, the San Jose, California-based company behind media editing software such as Photoshop, said on March 12 that it will provide $75 million worth of free services to eligible customers, in addition to a $75 million payment to the U.S. Department of Justice.
The DOJ sued Adobe in 2024 on behalf of the Federal Trade Commission (FTC), alleging that the company misled consumers by enrolling them in its “default, most lucrative subscription plan without clearly disclosing important plan terms.”
When customers tried to cancel, they were directed to go through what the FTC described as an “onerous and complicated” process involving multiple webpages and pop-ups. The agency said the company then “ambushes” customers with an early termination fee that could discourage them from completing the cancellation.
Customers faced similar difficulties when trying to cancel over the phone or through live chat, according to the complaint.
“Subscribers have had their calls or chats either dropped or disconnected and have had to re-explain their reason for calling when they re-connect,” it stated.
Adobe said it has now finalized a settlement agreement with the DOJ that will end the litigation. The company did not disclose full details of the settlement, including who may qualify for compensation, but pledged to “proactively reach out to the affected customers” once the necessary court filings are made and approved.
“While we disagree with the government’s claims and deny any wrongdoing, we are pleased to resolve this matter,” Adobe said in a statement.
The company also emphasized that its subscription plans now include a simpler cancellation process, and that the process has become “even more streamlined and transparent” in recent years.
The Epoch Times has reached out to the DOJ and FTC for more information.
The announcement came a day after Adobe said its longtime CEO, Shantanu Narayen, will step down once a successor is appointed.
Under Narayen, who became CEO in 2007, Adobe kept the PDF format entrenched as the global standard for digital documents while shifting the company away from one-time software license sales toward a subscription-based model centered on its Creative Cloud applications. More recently, the company has been seeking growth through generative artificial intelligence (AI).
“The next era of creativity is being written right now—shaped by AI, by new workflows and by entirely new forms of expression,” Narayen said in a company-wide message announcing his decision to depart.
Adobe has not yet named a candidate or provided a timeline for the leadership transition.