Adobe, the maker of Photoshop and Acrobat, has reached an agreement with the U.S. government to resolve accusations that it trapped subscribers with hidden early termination fees and made canceling difficult.
The deal includes a $75 million payment to the Department of Justice, plus another $75 million in free services for qualifying customers, the company said. Those customers will be notified directly once a court approves the settlement.
The Federal Trade Commission sued Adobe in 2024, charging that the maker of Photoshop and other creative tools steered people toward its “annual paid monthly” subscription plan without clearly explaining that canceling in the first year could cost hundreds of dollars.
The government said Adobe defaulted customers to that plan on its website, highlighting only the monthly price while burying the 50% early termination fee in small print or behind hover icons.
The complaint also accused the company of creating roadblocks during cancellations, including resistance from representatives, dropped calls, multiple transfers, and continued billing even after customers thought they had ended their subscriptions.
“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles,” Samuel Levine, former director of the FTC’s Bureau of Consumer Protection, said when the suit was filed, Fox 4 KDFW reported.
Adobe denied any wrongdoing but said it was pleased to end the litigation. The company added that it has streamlined its sign-up and cancellation processes in recent years to make them more transparent.
“While we disagree with the government’s claims and deny any wrongdoing, we are pleased to resolve this matter,” Adobe said in a statement. “We have agreed to provide $75 million worth of free services to customers that qualify.”
The company noted that its subscription model was designed to deliver continuous updates and new features at an affordable price while giving customers flexible options.
Subscriptions account for nearly all of Adobe’s revenue.
The settlement does not require the company to admit liability.