Adobe pays $75M to settle cancellation-fee lawsuit

Adobe will pay $75 million to settle a DOJ lawsuit accusing the company of hiding cancellation terms and steering Creative Cloud subscribers toward onerous termination fees.

In a lawsuit filed in June 2024, the U.S. government alleged that Adobe’s “annual paid monthly” plan was paired with opaque disclosures and a cancellation process so tangled that customers could be ambushed with early termination charges. The Verge’s coverage notes that the government framed the terms as part of a broader pattern of misleading or hard-to-avoid termination language, designed to trap customers in a service they thought they could leave more easily. The settlement, announced recently by Adobe, resolves the complaint without detailing new terms the company must adopt beyond the payment itself.

The core issue, according to the complaint, wasn’t a simple price mismatch but a pathway designed to obscure what customers were agreeing to and what they would owe if they tried to walk away. The DOJ framed the behavior as a violation of federal consumer-protection laws, arguing that the company failed to clearly disclose material terms and installed a cancellation journey that felt purpose-built to deter churn. The department’s action reflects a growing regulatory focus on subscription practices that rely on friction rather than transparency to maintain revenue.

From a consumer-advocacy and industry-ops perspective, the case highlights two enduring dynamics of the subscription era. First, “sticky” pricing—where plans are structured to deter cancelation—remains a powerful lever for revenue but increasingly vulnerable to legal and reputational risk when disclosures are murky. The $75 million settlement signals that federal authorities are watching not just what customers pay but how clearly they are told what they’re paying for and what happens if they leave. Second, even large software platforms can face meaningful penalties for terms that look opaque to the average user, nudging a broader reconsideration of for-profit practices around annual-commitment plans.

Practical takeaways for consumers and product teams: one, always scrutinize the fine print tied to annualized subscription options—even if you’re paying monthly, a plan may contain hidden fees or tricky cancellation routes. Two, for product and legal teams, there’s real incentive to simplify disclosures and streamline the cancellation flow so it’s as easy to exit as it is to enroll. Three, regulators are increasingly likely to demand explicit, conspicuous terms rather than “read between the lines” notices, especially for plans marketed as flexible or low-commitment. Four, for the industry, the case could serve as a blueprint for what counts as deceptive practice; expect more action, not fewer, if terms remain opaque or buried behind multiple screens and prompts.

What to watch next: in the wake of the settlement, Adobe and peers may publicly recalibrate how they disclose pricing and cancellation terms, and regulators could press for standardized language around exit terms. Consumers should review any contract that brands itself as “annual” but bills monthly, and keep documentation of terms in case of a dispute.

Sources

Adobe will pay $75 million to settle US cancellation fee lawsuit