Adobe reaches $150 million settlement of US lawsuit over termination fees, subscription cancellations

  • US government sued Adobe in June 2024
  • Adobe accused of burying fees, making terminations a hassle
  • Settlement includes $75 million fine, $75 million free ​services
  • Adobe says it streamlined processes, denied wrongdoing
Adobe reached a $150 ‌million settlement to resolve a U.S. government lawsuit accusing the Photoshop and Acrobat maker of harming consumers by concealing hefty termination fees and making it difficult to cancel subscriptions, the Department of Justice said ​on Friday.
The accord requires Adobe to pay a $75 million civil fine, and provide $75 ​million in free services to customers. Court approval is required.
In a ⁠June 2024 complaint, the Justice Department and Federal Trade Commission accused Adobe of burying termination ​fees for its popular “annual paid monthly” subscription plan, sometimes reaching hundreds of dollars, in the ​fine print or behind text boxes and hyperlinks.
They also said the San Jose, California-based company made cancelling subscriptions a hassle, forcing subscribers who wanted to cancel online to wade through numerous pages, and subscribers ​who wanted to cancel by phone to repeat themselves to multiple representatives and encounter “resistance ​and delay.”
Adobe was accused of violating the Restore Online Shoppers’ Confidence Act, a 2010 law barring merchants ‌from ⁠imposing charges, including for automatic subscription renewals, without disclosing material terms clearly and obtaining customer consent.
The settlement also resolved government claims against two Adobe executives.
“American consumers deserve the right to make informed choices when deciding where to spend their hard-earned money,” Brett Shumate, head ​of the Justice Department’s ​civil division, said in ⁠a statement.
In a statement on its website, Adobe said it has in recent years streamlined its sign-up and cancellation processes and made ​them more transparent.
“While we disagree with the government’s claims and deny ​any wrongdoing, ⁠we are pleased to resolve this matter,” Adobe said.
Subscriptions accounted for 97% of Adobe’s $6.4 billion in revenue for the quarter ending February 27.
Adobe’s settlement was announced one day after Chief Executive ⁠Shantanu Narayen ​said he will step down after more than 18 ​years in the role.
The company’s shares have fallen this year, reflecting investor concern about how artificial intelligence will affect Adobe’s ​business prospects.

Source: Reuters reported by Jonathan Stempel in New York, Editing by Louise Heavens and Bill Berkrot

Related News.

Subscribe to our newsletter!

if you dont want to swim alone in the ocean of news, sign up for the newsletter, and you will receive daily all the important news of world shipping!

* indicates required
Consent *
By submitting this form you agree to receive Email Marketing

Design & Development by P.KAN.DESIGNER

Design & Development by P.KAN.DESIGNER

Privacy Preference Center