Adobe’s Subscription Fight Ends in $150 Million DOJ Settlement

Adobe has agreed to a proposed $150 million settlement with the US Department of Justice over allegations that its online subscription practices misled customers about important plan terms, including early termination fees, and made cancellation too difficult.

The Justice Department said the proposed stipulated order would resolve its case against Adobe and two company employees, Maninder Sawhney and David Wadhwani, if approved by the court. 

Under the deal, Adobe would pay $75 million in civil penalties and provide another $75 million in free services to qualifying customers.

According to the DOJ, the case centered on alleged violations of the Restore Online Shoppers’ Confidence Act, or ROSCA, which requires companies offering online subscriptions to clearly disclose material terms and provide a simple way for users to cancel. 

The government alleged that Adobe used fine print and inconspicuous hyperlinks to hide key details about its plans, including a substantial early termination fee that some customers faced when canceling.

Federal officials also alleged that Adobe’s cancellation flow burdened subscribers with a drawn out process that included extra steps, delays, unsolicited offers, and warnings. 

“American consumers deserve the right to make informed choices when deciding where to spend their hard-earned money,” Assistant Attorney General Brett Shumate, head of the Justice Department’s Civil Division, said. “The Justice Department will strongly oppose any attempt to harm Americans with deceptive and unfair business practices.”

What Changes Adobe Would Have to Make

If the court enters the order, Adobe will be required to clearly disclose any early termination fee and explain how that fee is calculated before customers enroll in subscriptions, according to the DOJ. 

For free trials longer than seven days, Adobe must also remind users before the trial converts into a paid plan that includes an early termination fee. The order would also require the company to provide easier ways for subscribers to cancel.

The case traces back to litigation filed by the DOJ in June 2024 in the US District Court for the Northern District of California. Adobe had previously disclosed in securities filings that the government accused it of failing to clearly and conspicuously disclose material terms, failing to obtain express informed consent, and failing to provide a simple cancellation mechanism. 

Adobe also said in those filings that the court denied its motion to dismiss in May 2025 and that discovery was ongoing.

Adobe Says It Denies Wrongdoing

In a statement, Adobe said it has finalized a settlement agreement with the DOJ that would end the litigation tied to its disclosure and subscription cancellation practices. 

The company said it disagrees with the government’s claims and denies wrongdoing, but is pleased to resolve the matter. It also said it will proactively contact affected customers eligible for the free services after the appropriate court filings are accepted. 

The statement further said Adobe believes its terms are transparent and its cancellation process is simple, adding that it has made sign up and cancellation procedures more streamlined in recent years. 

For Adobe customers, the immediate question is who qualifies for the promised $75 million in free services. So far, the DOJ announcement says Adobe will provide that relief to qualifying customers, while Adobe says it plans to reach out proactively once the court process is completed. Neither statement published in the sources reviewed here gives a more detailed public breakdown yet of eligibility or timing. 

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