Adobe hidden subscription fees are at the centre of a landmark $150 million settlement with the U.S. Department of Justice and Federal Trade Commission, announced in March 2026 — roughly 20 months after the original lawsuit was filed in June 2024. The case targeted Adobe Inc. directly, along with two named executives: Maninder Sawhney, senior vice president of digital sales, and David Wadhwani, president of digital media business. Adobe denies wrongdoing but agreed to settle.
TL;DR: Adobe agreed to pay $150 million — split as $75 million in civil penalties and $75 million in free services to affected customers — to resolve federal allegations that it buried early termination fees in fine print and made subscriptions deliberately difficult to cancel. The settlement is pending court approval.
What Were Adobe’s Alleged Deceptive Practices?
Adobe’s core problem, according to the DOJ, was its “Annual, Paid Monthly” Creative Cloud plan. Subscribers selecting the monthly payment option were not clearly told they were committing to a full year. The early termination fee — typically around 50% of remaining monthly payments — was buried in fine print and inconspicuous hyperlinks rather than disclosed upfront.
The DOJ’s June 2024 complaint put it bluntly: “For years, Adobe has harmed consumers by enrolling them in its default, most lucrative subscription plan without clearly disclosing important plan terms”. That framing matters. Adobe wasn’t accused of hiding a minor footnote — it was accused of structuring the entire sign-up flow to obscure a fee that could run into hundreds of dollars.
Making things worse, those termination fees were apparently only revealed clearly when a subscriber tried to cancel — functioning, as the DOJ described it, as a “retention tool” that trapped consumers rather than informed them. The cancellation process itself involved multiple web pages, phone calls, and deliberate delays.
How the Adobe hidden subscription fees settlement breaks down
The $150 million settlement splits evenly: $75 million goes to the DOJ as civil penalties, and $75 million takes the form of free services distributed to eligible affected customers. Adobe must proactively contact those customers once the court filings are formally accepted — the proposed order is currently awaiting court approval in the U.S. District Court for the Northern District of California.
Beyond the money, the settlement imposes concrete behavioural requirements. Adobe must clearly disclose early termination fees and their calculation method before a customer enrolls, not after. Free trials lasting longer than seven days must trigger a reminder before they convert to paid subscriptions. And cancellation must become genuinely straightforward. These aren’t optional improvements — they’re injunction terms.
Adobe’s public response was carefully worded: “While we disagree with the government’s claims and deny any wrongdoing, we are pleased to resolve this matter. We are transparent with the terms and conditions of our subscription agreements, have a simple cancellation process and clearly disclose the details of our plans”. That statement sits awkwardly alongside a $150 million settlement and a federal injunction requiring exactly the transparency Adobe claims it already provided.
Why this settlement matters beyond Adobe
This case represents one of the most significant enforcement actions under the Restore Online Shoppers’ Confidence Act (ROSCA), a U.S. law requiring companies to clearly disclose subscription terms and offer simple cancellation methods. The fact that the DOJ and FTC pursued named executives — not just the corporation — signals an intent to hold individuals accountable for subscription design decisions, not just the companies that profit from them.
Assistant Attorney General Brett A. Shumate framed the stakes clearly: “American consumers deserve the right to make informed choices when deciding where to spend their hard-earned money”. That’s a statement of principle that extends well beyond Creative Cloud. Any software company running an annual-commitment plan disguised as a monthly subscription should be paying close attention.
Adobe’s products — Photoshop, Acrobat, Premiere Pro, and the broader Creative Cloud suite — have no direct equivalent that matches the full feature set at a comparable price point. That near-monopoly position in professional creative software arguably made the alleged practices more harmful: users who needed the tools had limited alternatives and faced steep exit costs they may not have known existed when they signed up.
Is Adobe Creative Cloud still worth subscribing to after this?
The settlement doesn’t change what Adobe’s software does — Photoshop, Premiere Pro, and Acrobat remain the industry standard tools for millions of professionals worldwide. What it should change is how you read the subscription terms before clicking “subscribe.” Under the new requirements, Adobe must disclose termination fees before enrollment, which means the information that was allegedly buried will now have to be front and centre.
If you were an Adobe subscriber affected by these practices, watch for direct contact from Adobe once the court accepts the proposed settlement. The $75 million in free services will go to eligible customers, though the distribution methodology has not been specified.
What does the Adobe settlement mean for Creative Cloud subscribers?
Eligible affected customers will receive a share of $75 million in free Adobe services, distributed after court approval of the proposed order. Adobe is required to proactively contact those customers — you should not need to file a claim independently, though monitoring official communications is sensible until the distribution process is confirmed.
What is ROSCA and why does it apply to Adobe?
ROSCA, the Restore Online Shoppers’ Confidence Act, is a U.S. federal law requiring companies to clearly disclose all subscription terms — including fees and cancellation conditions — before a consumer agrees to pay. The DOJ and FTC alleged Adobe violated ROSCA by concealing early termination fees and making cancellation deliberately difficult. The settlement includes an injunction requiring Adobe to comply with ROSCA going forward.
Can Adobe subscribers outside the US benefit from this settlement?
The settlement applies specifically to U.S. consumers and was filed in U.S. federal court. Subscribers in other markets are not covered by this particular agreement. However, the behavioural changes Adobe is required to make — clearer fee disclosure, simpler cancellation, trial conversion reminders — may influence how Adobe structures its subscription flows globally, since maintaining separate deceptive practices for international markets while complying in the U.S. would be operationally awkward and reputationally risky.
Adobe’s $150 million settlement is a wake-up call that lands far beyond one company’s legal department. It confirms what many Creative Cloud users long suspected: that the gap between “monthly plan” and “annual commitment” was being obscured by design, not by accident. The injunction terms now force the transparency that should have been there from the start — and set a precedent that other subscription-dependent software companies would be unwise to ignore.
This article was written with AI assistance and editorially reviewed.
Source: TechRadar
