Adobe reaches $150 million settlement of US lawsuit over termination fees, subscription cancellations
The Hindu
In a statement on its website, Adobe said it has in recent years streamlined its sign-up and cancellation processes and made them more transparent.
Adobe reached a $150 million settlement to resolve a U.S. government lawsuit accusing the Photoshop and Acrobat maker of harming consumers by concealing hefty termination fees and making it difficult to cancel subscriptions, the Department of Justice said on Friday.
The accord requires Adobe to pay a $75 million civil fine, and provide $75 million in free services to customers. Court approval is required. In a June 2024 complaint, the Justice Department and Federal Trade Commission accused Adobe of burying termination fees for its popular “annual paid monthly” subscription plan, sometimes reaching hundreds of dollars, in the fine print or behind text boxes and hyperlinks.
They also said the San Jose, California-based company made cancelling subscriptions a hassle, forcing subscribers who wanted to cancel online to wade through numerous pages, and subscribers who wanted to cancel by phone to repeat themselves to multiple representatives and encounter “resistance and delay.”
Adobe was accused of violating the Restore Online Shoppers’ Confidence Act, a 2010 law barring merchants from imposing charges, including for automatic subscription renewals, without disclosing material terms clearly and obtaining customer consent.
The settlement also resolved government claims against two Adobe executives.
“American consumers deserve the right to make informed choices when deciding where to spend their hard-earned money,” Brett Shumate, head of the Justice Department’s civil division, said in a statement.
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