For anyone who has ever tried to cancel an Adobe Creative Cloud subscription and found themselves navigating a maze of warnings, offers, retention pitches, and hidden fees, Friday’s news carried a grim satisfaction.
The Justice Department announced a proposed settlement requiring Adobe to pay $75 million in civil penalties and offer customers $75 million in free services, resolving allegations that the company’s subscription practices violated the Restore Online Shoppers’ Confidence Act — a law that requires companies offering online subscriptions to clearly disclose important information and provide simple cancellation mechanisms.
The case had been building since June 2024, when federal prosecutors in the Northern District of California alleged that Adobe had systematically hidden the true cost of its annual subscriptions.
The core complaint was straightforward: the DOJ alleged Adobe failed to adequately disclose to consumers that by signing up for the “Annual, Paid Monthly” plan they were agreeing to a yearlong commitment and a hefty early termination fee that could amount to hundreds of dollars — clearly disclosing the fee only when subscribers attempted to cancel, turning it into a powerful retention tool.
Adobe said it disagrees with the government’s claims and denies any wrongdoing, but is pleased to resolve the matter. The company agreed to provide $75 million worth of free services to customers that qualify and will proactively reach out to affected customers once the appropriate filings with the court are accepted, in addition to the $75 million cash payment to the Department of Justice.
The dual structure of the settlement is worth noting. The cash payment to the DOJ is punitive. The $75 million in free services is operationally significant — it requires Adobe to absorb the cost through product delivery rather than treat the entire settlement as a simple cheque. The company must also operate under an injunction requiring clearer disclosure practices going forward, meaning the settlement reshapes the Business, not just the balance sheet.
In raw financial terms, $150 million is a rounding error for a company of Adobe’s size — roughly 0.6% of its 2025 revenue. But the reputational and regulatory consequences are more lasting. This settlement is the clearest official confirmation yet that Adobe’s subscription model was, by design, harder to leave than to join. That finding will inform future regulatory scrutiny not just of Adobe but of the entire software-as-a-service industry, where annual-plan lock-in and obscured cancellation flows have become standard practice. Expect the FTC and DOJ to use this case as a template.