Adobe Pays $150 Million to Settle Hidden Subscription Fee Case

Adobe reached a $150 million settlement with the US Department of Justice on March 13, ending a case that began with an FTC investigation in December 2023 and a lawsuit filed in June 2024. The case accused Adobe of burying early termination fees in fine print and creating deliberate friction when customers tried to cancel. The FTC's framing was direct: Adobe "trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles." The settlement includes $75 million in civil penalties paid to the DOJ and another $75 million delivered as free services to qualifying customers. Adobe said it disagrees with the government's claims but chose to resolve the matter. The specific practice at the center of the case was Adobe's "annual paid monthly" plan structure. Customers who signed up often did not realize they were committing to a full year. If they cancelled before 12 months, they faced an early termination fee calculated at roughly 50% of the remaining payments owed. That fee was disclosed only in fine print and inconspicuous hyperlinks, not at the point of purchase. Under the settlement terms, Adobe is now required to clearly disclose any early termination fee and how it is calculated before a customer completes signup. For free trials lasting more than seven days, Adobe must remind customers before the trial converts to a paid subscription that includes such a fee. The company must also provide easy, clearly accessible cancellation paths. Two senior Adobe executives, Maninder Sawhney and David Wadhwani, were named in the original complaint alongside the company. The settlement is one of the largest ever imposed for subscription billing practices and is already influencing how other SaaS companies review their own cancellation flows. Several major software companies quietly updated their pricing and cancellation pages within weeks of the March 13 announcement. For agencies and freelancers in Nigeria using Adobe Creative Cloud, the practical outcome is better protection at signup. If you are currently on an Adobe plan and were previously charged a cancellation fee without understanding it upfront, the $75 million in customer remedies is worth checking when Adobe begins outreach to qualifying users. More broadly, this case is a reminder to read subscription terms on any annual billed monthly plan before committing, regardless of the platform. Subscription pricing design that obscures real costs is now a legal liability, not just a trust problem.