Adobe to Pay £113M After US Justice Department Says It Made Subscriptions Too Hard to Cancel
Adobe has agreed to a £113 milliom ($150 million) total settlement with the US Department of Justice after the government alleged it buried cancellation fees in fine print and turned subscription exits into an obstacle course. The proposed stipulated order, filed on March 13, 2026 in the US District Court for the Northern District of California, requires Adobe to pay £56.7 million ($75 million) in civil penalties to the Justice Department and provide an additional £56.7 million ($75 million) in free services to affected customers.The case, originally filed in June 2024, accuses the company of violating the Restore Online Shoppers' Confidence Act (ROSCA), a federal law that requires companies to clearly disclose subscription terms and make cancellation simple. The settlement still requires final court approval before it takes effect. The announcement arrives at a turbulent moment for the company, with Adobe revealing the day before that long-serving chief executive Shantanu Narayen intends to step down once a successor is named, ending an 18-year tenure that saw the company pivot from boxed software to a cloud subscription empire now generating more than £14.67 billion ($19.4 billion) in annual revenue.The Government's CaseThe original complaint, filed June 17, 2024, was brought jointly by the Justice Department and the Federal Trade Commission (FTC) against Adobe and two of its executives, David Wadhwani, president of Adobe's Digital Media Business, and Maninder Sawhney, vice president of Digital Go-to-Market and Sales. Both men remain named in the settlement order.According to the complaint, Adobe's 'Annual, Paid Monthly' subscription plan, one of its most widely sold offerings, enrolled customers in a year-long commitment without making that commitment clear at the point of sign-up. The government alleged that the Early Termination Fee (ETF), which could run to hundreds of dollars, was hidden behind 'fine print and inconspicuous hyperlinks' and only revealed in full when a subscriber tried to cancel.In the complaint documents reviewed, government attorneys quoted an Adobe executive describing the Early Termination Fee as 'a bit like heroin for Adobe,' reflecting how heavily the company had come to rely on the fee as a subscriber retention mechanism. Adobe has not disputed the existence of the internal statement.The government further alleged that Adobe deliberately complicated the cancellation process. According to the DOJ's June 2024 press release, subscribers attempting to exit their plans were subjected to 'unnecessary steps, delays, unsolicited offers, and warnings,' a pattern the government characterised as designed to exhaust or deter customers rather than assist them.What the Proposed Order Requires Adobe to DoBeyond the financial penalties, the proposed stipulated order imposes ongoing behavioural obligations on the company. Adobe must now clearly disclose any Early Termination Fee, and the method by which it is calculated, before a customer completes enrolment in any subscription. The requirement applies upfront, not after payment details have been entered.For any free trial lasting longer than seven days, Adobe must also send a reminder to customers before converting that trial into a paid subscription that carries an Early Termination Fee. The company must additionally provide subscribers with a straightforward and accessible means of cancelling their subscriptions, the absence of which formed the centrepiece of the government's original complaint.
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The Justice Department said affected customers will be contacted by Adobe directly once the appropriate court filings are accepted. In its own statement on March 13, 2026, Adobe said it 'disagrees with the government's claims and denies any wrongdoing' but that it is 'pleased to resolve this matter.' The company added that it has already taken steps to improve transparency around its subscription terms and cancellation processes in recent years.Assistant Attorney General Brett A. Shumate, who heads the Justice Department's Civil Division, was direct in framing the department's position. 'American consumers deserve the right to make informed choices when deciding where to spend their hard-earned money,' Shumate said. 'The Justice Department will strongly oppose any attempt to harm Americans with deceptive and unfair business practices.'Adobe Subscription Growth and Regulatory ScrutinyThe DOJ case cuts to the financial core of Adobe's modern business. The government's own complaint document, drawn from Adobe's public filings, noted that the company's subscription-based revenue rose from £5.8 billion ($7.71 billion) in 2019 to £10.75 billion ($14.22 billion) by 2023, nearly doubling in four years. Subscription income accounted for the vast majority of Adobe's total revenue by that time.
That model and the way Adobe monetised exit barriers within it is exactly what regulators targeted. ROSCA, the statute at the centre of the case, was enacted in 2010 to address online subscription practices that disadvantage consumers, and the DOJ has increasingly applied it to large technology and software firms. The Adobe settlement represents one of the most significant ROSCA enforcement actions brought against a Fortune 500 company.Adobe's share price had fallen roughly 23% in the months prior to the announcements, according to reporting by CNBC, reflecting investor concern over the company's ability to compete in an AI-driven software market. The settlement, the CEO departure and a tepid revenue forecast were disclosed in rapid succession, creating a concentrated set of pressures for whichever executive ultimately inherits the role.For millions of customers who paid to exit an Adobe subscription they no longer wanted, the settlement may provide a measure of accountability, but only if the court approves.
