Adobe Agrees $150 Million Settlement Over Subscription Practices

Adobe has agreed to a $150 million settlement with US regulators over allegations that it hid key subscription terms and made cancellations unnecessarily difficult, bringing renewed attention to how subscription-based services are designed and enforced.

What The Case Was About

The case, brought by the US Department of Justice (DOJ) and the Federal Trade Commission (FTC), focused on Adobe’s “annual paid monthly” subscription plan, widely used across products such as Photoshop and Acrobat.

Regulators alleged that Adobe failed to clearly disclose early termination fees, which could reach hundreds of dollars, and placed this information in fine print or behind hyperlinks that many users would not reasonably see.

The complaint also claimed that cancelling a subscription was overly complex. Customers attempting to cancel online were reportedly required to navigate multiple pages, while those cancelling by phone faced delays, repeated explanations, and resistance.

In simple terms, the government argued that customers were not being given a clear, informed choice at sign-up, and were then discouraged from leaving.

Understanding ROSCA In Plain English

At the centre of the case is the Restore Online Shoppers’ Confidence Act (ROSCA), a US law introduced in 2010.

ROSCA requires businesses offering online subscriptions to do three basic things, which are to clearly explain all important terms before charging customers, obtain explicit informed consent before billing, and provide a straightforward way to cancel.

The law was designed to prevent so-called “dark patterns”, where companies use design techniques to push users into decisions they might not otherwise make.

In this case, regulators argued that Adobe’s processes fell short on all three counts.

What The Settlement Includes

The proposed settlement, which still requires court approval, includes both financial and operational measures.

Adobe will pay a $75 million civil penalty and provide $75 million worth of free services to affected customers. It must also introduce clearer disclosures around early termination fees, improve cancellation processes, and provide reminders before free trials convert into paid subscriptions where fees may apply.

The agreement also resolves claims against two senior Adobe executives named in the original complaint.

Regulator Response

US officials framed the case as part of a broader effort to tackle deceptive subscription practices across digital services.

“American consumers deserve the right to make informed choices when deciding where to spend their hard-earned money,” said Assistant Attorney General Brett A. Shumate, head of the Justice Department’s Civil Division. “The Justice Department will strongly oppose any attempt to harm Americans with deceptive and unfair business practices.”

“Consumers should not have to navigate a digital maze to cancel a subscription,” said U.S. Attorney Craig H. Missakian for the Northern District of California. “We will continue to hold responsible any company that uses deceptive business practices to harm the consumer.”

These statements underline a clear regulatory direction that subscription models must be built around transparency and user control.

Adobe’s Response

Adobe has denied wrongdoing while agreeing to settle the case.

In a statement, the company said it had already streamlined its subscription sign-up and cancellation processes and made them more transparent in recent years, adding that it was “pleased to resolve this matter”.

Adobe has also maintained that its subscription services are designed to be flexible and cost-effective, allowing users to choose plans that suit their needs, timeline and budget.

The decision to settle appears to be a practical step to close the case rather than an admission of liability.

Why This Matters Now

This case comes at a time when subscription-based models dominate much of the software industry.

Adobe itself generates the vast majority of its revenue from subscriptions, a model it helped to popularise. At the same time, regulators are increasing scrutiny of how these models are implemented, particularly where customer choice may be constrained.

There is also wider pressure on Adobe, including growing competition from AI-driven tools and uncertainty following the announced departure of its long-standing CEO.

The result is a situation where both regulatory and market pressures are converging on how digital services are delivered.

What Does This Mean For Your Business?

For UK businesses, even though ROSCA is a US law, the underlying expectations closely mirror UK consumer protection principles and CMA guidance around fairness and transparency.

Clear, upfront disclosure is becoming non-negotiable. Key terms such as pricing, renewal conditions, and cancellation fees need to be visible at the point of purchase, not hidden in links or lengthy terms and conditions that users are unlikely to read in full.

Cancellation processes are also under growing scrutiny. If a customer can sign up quickly online, they should be able to cancel just as easily. Any unnecessary friction, delays or forced interactions may now be viewed as a compliance risk rather than a commercial tactic.

There is also a broader design implication. Subscription journeys, user interfaces, and account settings are no longer just product decisions. They are part of regulatory compliance, with enforcement bodies increasingly examining how digital experiences influence user behaviour.

Customer expectations are changing as well. Users are more aware of their rights and less tolerant of being locked into services they no longer want, which means poor subscription design can quickly become a reputational issue.

For MSPs, SaaS providers and any business using recurring billing, this case is a clear signal. Transparent pricing, simple processes and easy exits are becoming the standard. Businesses that align with these expectations are more likely to build trust and retain customers, while those that do not risk both regulatory action and customer dissatisfaction.