Adobe will pay $75 million to settle a U.S. lawsuit alleging deceptive practices concerning subscription cancellations and termination fees. The software giant will also provide $75 million in free services to customers as part of the agreement, which requires court approval.
The Justice Department and Federal Trade Commission accused Adobe of hiding substantial termination fees for its "annual paid monthly" plan in fine print and behind obscure text boxes. The lawsuit also detailed how Adobe made canceling subscriptions intentionally difficult, involving lengthy online processes and resistance from customer service representatives.
Adobe was charged with violating the Restore Online Shoppers’ Confidence Act, a law requiring clear disclosure of terms and customer consent for subscription renewals. The company stated it has recently improved its sign-up and cancellation processes for greater transparency.
"While we disagree with the government's claims and deny any wrongdoing, we are pleased to resolve this matter," Adobe said in a statement. This settlement follows the announcement that CEO Shantanu Narayen will step down after 18 years. Adobe's stock has seen declines this year amidst concerns about AI's impact on its business.