Adobe has agreed to pay $150 million to settle claims made by the United States Department of Justice that the software company breached a federal consumer protection law in the way that it handled its subscriptions.
The software company agreed to the payment to settle a lawsuit filed against Adobe, and the case involves the Restore Online Shoppers’ Confidence Act, which requires companies to disclose information about subscriptions and make cancellation easy.
The agreement to settle the case was made public on March 13, 2026, and the case has been ongoing since June 2024, when the Justice Department accused Adobe of not disclosing key information about subscription commitments and cancellation fees.
What does the $150 million settlement include?
The agreement splits the payment into two parts:
- $75 million in civil penalties paid to the Justice Department
- $75 million in free services offered to affected customers
Adobe will notify the customers who qualify for the deal once the court approves it. They may benefit from free service credits as part of the compensation offer.
The financial effect of the deal will not have a major impact on Adobe. The amount of the deal as a percentage of Adobe’s revenue in 2025 will be only 0.6%.
What the government alleged
The Justice Department focused on Adobe’s “Annual, Paid Monthly” subscription plan. According to regulators, many customers believed they were signing up for a flexible monthly service.
Instead, the plan required a full one-year commitment.
Prosecutors said Adobe did not clearly explain this commitment during sign-up. They also argued the company failed to show the early termination fee in a clear way before users enrolled.
Customers who tried to cancel early often discovered the fee only during the cancellation process. In some cases, the charge could reach hundreds of dollars, depending on the remaining months in the contract.
The lawsuit claimed this structure trapped users in subscriptions they did not want.
Under ROSCA, companies must meet two basic rules:
- Clear disclosure of all key terms before a user signs up
- A simple cancellation process
The Justice Department argued Adobe did not fully meet either requirement.
Required changes to the subscription system of Adobe
The settlement includes an injunction, which forces Adobe to change how it presents subscription terms.
Under the agreement, Adobe must:
- Clearly show early termination fees before customers sign up
- Explain how those fees are calculated
- Improve the cancellation process so users can leave subscriptions more easily
These changes aim to prevent confusion about long-term commitments and unexpected fees.
Subscription businesses across the software industry use similar plans. Because of that, regulators see the case as an important signal for the wider market.
Adobe’s response
Adobe denies that it broke the law. The company said its subscription terms were already clear and that its cancellation process followed industry standards. Even so, Adobe chose to settle the case to end the dispute.
In its statement, the company said it has already simplified sign-up and cancellation flows to make the process easier for users.
Adobe also noted that the settlement does not include an admission of wrongdoing.
Why does the case matter?
The case highlights growing scrutiny of subscription business models, which many technology companies rely on for steady revenue.
Services such as creative software, streaming platforms, and cloud tools often use annual plans with monthly payments. These structures can create confusion if the contract terms are not easy to see.
Regulators have stepped up enforcement of subscription rules in recent years. They argue that companies must make costs, commitments, and exit options clear at the start.
The settlement with Adobe shows how seriously the government views those obligations.
For customers, the changes could lead to clearer pricing and easier cancellations across many online services. For software companies, the case serves as a reminder that subscription design must meet strict consumer protection standards.
