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Federal officials announced a proposed settlement with software company Adobe Inc. after allegations that the company used confusing subscription cancellation practices that made it difficult for customers to understand charges and discontinue services. The agreement, filed by the U.S. Department of Justice, would require Adobe to pay $150 million in combined penalties and customer benefits if approved by a federal court.
The case centers on the Restore Online Shoppers’ Confidence Act, a federal law designed to protect people who sign up for online subscriptions. The law requires companies to clearly explain billing terms, disclose important fees before enrollment, and provide simple ways for customers to cancel recurring services. Government attorneys claimed Adobe failed to meet those standards through the way it presented subscription details and handled cancellation requests.
According to the complaint filed in federal court in Northern California, Adobe allegedly hid key information about its subscription plans in fine print or behind links that were not easy to notice. Officials said customers were not clearly informed about an Early Termination Fee that could apply when ending certain plans before the contract period ended. Some users reportedly learned about the fee only after attempting to cancel their subscriptions.
The government also alleged that customers faced complicated cancellation procedures. The process was described as lengthy and filled with extra steps, repeated prompts, and offers intended to persuade subscribers to remain enrolled. Officials argued that these practices created unnecessary obstacles and prevented customers from ending services quickly.
Under the proposed settlement, Adobe would pay $75 million in civil penalties to resolve the claims. The company would also provide $75 million worth of free services to affected customers. These benefits are intended to compensate subscribers while avoiding prolonged litigation.
In addition to financial penalties, the agreement outlines several changes to how Adobe must handle subscriptions moving forward. The company would be required to clearly disclose any early cancellation fees before a customer signs up. The settlement also requires an explanation of how those fees are calculated so subscribers understand potential costs in advance.
Another requirement addresses free trials that automatically convert into paid subscriptions. For trials lasting longer than seven days, Adobe must send reminders before charging customers, especially when the paid plan includes a termination fee. Federal officials say reminders give consumers time to decide whether they want to continue or cancel before billing begins.
The agreement also focuses on simplifying cancellation. Adobe would need to provide straightforward methods for ending subscriptions, reducing the number of steps customers must complete. Officials say these changes are meant to restore consumer control over recurring payments and prevent confusion about ongoing charges.
Government representatives stated that the action reflects broader efforts to enforce consumer protection laws in the digital marketplace. As subscription-based services have expanded across software, entertainment, and online platforms, regulators have increased scrutiny of how companies present pricing and cancellation terms. Authorities say clear disclosures help people make informed financial decisions and avoid unexpected costs.
The case involved cooperation between several federal offices, including attorneys from the Justice Department’s Civil Division and staff from the Federal Trade Commission’s Bureau of Consumer Protection. The agencies worked together to investigate the company’s practices and negotiate the proposed resolution.
The settlement does not become final unless approved by a federal judge. If entered by the court, the order would legally bind Adobe to follow the new requirements. Failure to comply could result in additional penalties or enforcement actions.
Consumer advocates have long argued that subscription services can create confusion when billing details are difficult to locate or cancellation options are hard to find. Federal officials say enforcement actions like this one are intended to send a message across industries that transparency and fairness remain legal obligations, not optional features.
The outcome of the case may influence how other technology companies design subscription systems in the future. As more services shift toward recurring payment models, regulators continue to watch how businesses balance convenience with clear communication about costs and commitments. The proposed settlement signals that federal agencies are prepared to challenge practices they believe limit consumer choice or hide important information.
Sources:
Adobe Agrees to $150 Million DOJ Settlement Over Hard-to-Cancel Subscriptions Under ROSCA Probe
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