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Adobe Settles U.S. Lawsuit Over Allegedly Hidden Subscription Fees and Difficult Cancellations

By TheFinanceBase Team6 min read
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Update: Adobe’s U.S. subscription case is no longer simply a pending lawsuit. On March 13, 2026, the company agreed to a proposed $150 million settlement with the U.S. Department of Justice. The deal combines a $75 million civil-penalty payment with $75 million in free Adobe services for qualifying customers. Adobe denies wrongdoing.

The case centered on Adobe’s “annual, billed monthly” subscriptions, alleged early-termination fees and a cancellation process that regulators said was unnecessarily difficult. The complaint contained allegations, not a final finding that Adobe violated the law.

Why the U.S. sued Adobe

The DOJ filed its civil complaint on June 17, 2024, in the U.S. District Court for the Northern District of California, after an investigation by the Federal Trade Commission. The defendants were Adobe, Maninder Sawhney and David Wadhwani. The government alleged violations of the Restore Online Shoppers’ Confidence Act (ROSCA) and the FTC Act.

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According to the DOJ complaint and the FTC’s case summary, Adobe did not clearly and prominently disclose important subscription terms, including an early-termination fee, before customers enrolled. The government also alleged that Adobe made cancellation unnecessarily complicated.

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Adobe said its pricing and cancellation disclosures were transparent and defended its subscription model. In March 2026, the company said it denied the allegations but agreed to settle to end the litigation.

The pricing issue: “annual, billed monthly” is not ordinary month-to-month service

The plan label was central to the dispute. An annual commitment, billed monthly collects monthly installments but generally commits the customer for a year. Cancelling during the first year can trigger an early-termination fee.

That is different from a true month-to-month plan, which is generally more flexible but often costs more, and from an annual prepaid plan, where the customer pays upfront and follows different cancellation and refund rules.

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The government alleged that Adobe sometimes made the annual-paid-monthly option especially prominent while placing material restrictions in less prominent text or linked disclosures. ROSCA does not automatically ban annual commitments or cancellation fees. Its practical requirements are that material terms be clearly disclosed, consumers provide informed consent and recurring charges can be stopped through a simple cancellation mechanism.

A hypothetical illustrates the concern: a customer may see a low monthly price, assume it can be cancelled at any time, and only discover the annual obligation and fee when attempting to cancel. The actual fee and terms depend on the plan, date, country, customer type and purchase channel.

What regulators alleged about cancellation

The FTC and DOJ said the cancellation flow could involve multiple screens, offers, warnings and confusing navigation before a customer reached the actual cancellation control. The alleged problem was therefore broader than charging a fee: regulators challenged both disclosure of the commitment and the practical ease of ending recurring billing.

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Those descriptions concern the conduct alleged in the 2024 complaint. They should not be treated as proof that every current Adobe checkout or cancellation screen is unlawful or identical to the historical process.

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What the March 2026 settlement does

The DOJ’s settlement announcement describes two $75 million components:

  • $75 million in civil penalties paid to the U.S. government.
  • $75 million in free Adobe services for eligible customers.

This is not a $150 million cash refund fund. The customer portion is primarily free access or credits for selected Adobe services.

The proposed order also requires Adobe to clearly disclose any early-termination fee before enrollment, explain how the fee is calculated, remind customers before a free trial converts into a paid plan with such a fee when the trial lasts longer than seven days, and provide an easy cancellation method. These are forward-looking requirements, not a judicial finding that current terms violate the law.

Who may qualify for the Adobe customer benefit?

Adobe’s settlement-benefit FAQ says eligibility generally requires all of the following:

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  • You were a U.S. customer.
  • You subscribed to a Creative Cloud app at some point from January 2019 through July 2025.
  • You paid an early-termination fee.
  • Your monthly payments plus that fee exceeded what a comparable month-to-month plan would have cost for the same period.

That means not every Adobe subscriber, every person who cancelled, or every customer unhappy with Adobe’s pricing qualifies. Customers who never paid an early-termination fee, customers outside the United States and people whose subscriptions fall outside the stated period may not be eligible. App-store purchases, enterprise agreements, education plans, reseller transactions and business accounts may follow different rules.

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What eligible customers receive

Adobe says an eligible active subscriber receives two free months automatically on each eligible active subscription. Billing then resumes under the existing plan terms.

Eligible former customers can redeem two free months of one selected Adobe product, reportedly without entering a credit card or making a new subscription commitment. Adobe says the former-customer offer expires automatically after the free period and can be redeemed through December 31, 2027. An annual-prepaid customer may instead receive a credit equal to two months at the next renewal, with the annual renewal price adjusted accordingly.

The benefit is not necessarily cash, a reimbursement of the exact fee charged or access to every Adobe product. Check the specific product and terms in the official notice.

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How to check your status safely

  1. Search the email address linked to your Adobe account for Adobe’s settlement notice. Check spam, junk and promotions folders.
  2. If you are an active subscriber, sign in to Adobe and open Account → Billing and Payment → Your Plan to look for the credit.
  3. If you are a former customer, use the redemption link in Adobe’s email rather than a third-party claims website.
  4. If you no longer control the old email address, contact Adobe Support through Adobe’s official website.
  5. Keep invoices, cancellation confirmations and records of any termination-fee charge.

Do not provide payment details to an unsolicited “claim” site. Also, do not cancel an active plan merely to seek the benefit; Adobe says eligible active customers receive the credit automatically. Before accepting any offer that differs from the settlement benefit, confirm whether it will create a new paid subscription after a trial or free period.

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Adobe prices currently shown in the U.S.

Adobe’s U.S. individual-plan pages showed these prices on August 18, 2026:

Product Displayed price and billing label
Single Creative Cloud app From $22.99 per month, annual billed monthly
Creative Cloud Pro $69.99 per month, annual billed monthly
Photoshop $22.99 per month, annual billed monthly
Photography plan $19.99 per month, annual billed monthly
Firefly Pro $19.99 per month, billed monthly
Student and teacher offer $19.99 per month for the first year, then $39.99, subject to eligibility

See Adobe’s Creative Cloud pricing page and Photoshop plans page for current terms. Prices, taxes, promotions and availability can change. “Annual, billed monthly” still signals a commitment plan, so read the cancellation section before entering payment details.

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Should customers switch software?

The settlement does not make switching automatically worthwhile. Users who depend on Photoshop, Illustrator, Premiere Pro, After Effects, InDesign, Adobe fonts, plugins, cloud libraries or client file compatibility may face migration and retraining costs.

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Workflow-specific alternatives include Affinity for photo, vector and layout work; DaVinci Resolve for video, color and audio; Canva Pro for browser-based design; Capture One for photography; CorelDRAW for vector and page layout; and GIMP for free raster editing. Each has compatibility, feature or subscription trade-offs, and several also offer recurring plans.

Timeline

  • March 20, 2024: Adobe disclosed that the FTC had authorized filing of the case.
  • June 17, 2024: DOJ filed the complaint.
  • May 2, 2025: Adobe reported that the court denied its motion to dismiss.
  • March 12–13, 2026: Adobe and DOJ reached the settlement; a dismissal stipulation was filed.
  • April 30, 2026: Adobe updated its benefit FAQ.

Frequently Asked Questions

Is the Adobe settlement a cash refund?

No. The $150 million total consists of $75 million in civil penalties and $75 million in free Adobe services for qualifying customers.

Does every Adobe subscriber qualify?

No. Adobe’s stated criteria generally require a U.S. Creative Cloud subscription between January 2019 and July 2025, payment of an early-termination fee and a comparative-cost condition.

Did Adobe admit it deceived customers?

No. Adobe denied wrongdoing and settled the government’s allegations without an admission of liability.

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The Bottom Line

Adobe’s case has been resolved through a $150 million settlement, not a $150 million cash payout to all subscribers. U.S. customers who fit Adobe’s published time, fee and cost criteria should check official Adobe email and account notices, while everyone else should treat “annual, billed monthly” as a commitment plan and review cancellation terms before enrolling.

Quick Recap

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Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.

Written by TheFinanceBase Team

The Team behind TheFinanceBase.

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