(Credit: Michel Porro/Getty Images)
Adobe has settled a 2024 lawsuit from the US government that alleged the company used hidden fees to trap users into paying for subscriptions.
On Friday, Adobe “finalized” an agreement with the Justice Department, which accused the software vendor of failing to inform new customers about payment terms or early termination fees. “While we disagree with the government’s claims and deny any wrongdoing, we are pleased to resolve this matter,” Adobe says.
The announcement adds that Adobe will “provide $75 million worth of free services to customers that qualify. We will proactively reach out to the affected customers once the appropriate filings with the Court are made and accepted.”
Adobe didn't reveal who is eligible for the offer. But the free service stipulation is briefly mentioned in the settlement agreement, which was filed today.
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The agreement targets Adobe’s use of "negative options," a practice in which a consumer’s silence or failure to cancel is treated as consent for the company to charge recurring subscription fees. The settlement blocks Adobe from using the tactic with its subscriptions, including for free trials. Instead, the company will need to clearly disclose the terms, including early cancellation fees, to customers before obtaining billing information.
In addition, the agreement bans Adobe from hiding such disclosures through links or separate windows on its website. The order also requires the company to give advance notice and send email notifications to free-trial users that they’ll eventually be converted to a paid subscription plan. Another important requirement is for Adobe to implement a simple cancellation process.
On top of all this, Adobe will pay the US government an additional $75 million civil penalty. The Justice Department didn’t immediately respond to a request for comment about whether any of that $75 million will be returned to affected consumers.
The Justice Department filed the lawsuit on a referral from the Federal Trade Commission, which noted in 2024 that consumers had spent years complaining about early termination fees for Adobe products. The FTC declined to comment on the settlement.