Adobe to Pay $150 Million to Settle Subscription Cancellation Lawsuit

Key Takeaways

• Adobe will pay $150 million to settle a DOJ lawsuit over hidden subscription fees and difficult cancellation processes.
• The settlement includes a $75 million civil penalty plus $75 million in free services for affected customers.
• Adobe must now clearly disclose early termination fees and provide easy cancellation options going forward.
• The company denies any wrongdoing despite agreeing to major changes in its subscription practices.

Adobe has agreed to pay $150 million to settle a lawsuit brought by the U.S. Department of Justice over its subscription cancellation practices — a resolution that will resonate with millions of photographers who rely on Creative Cloud for Photoshop, Lightroom, and other essential tools.

The settlement, announced on March 13, 2026, ends a case filed in June 2024 that accused Adobe of hiding hefty early termination fees in fine print and making it unnecessarily difficult for customers to cancel their subscriptions.

What Adobe Was Accused Of

The DOJ’s original complaint alleged that Adobe violated the Restore Online Shoppers’ Confidence Act (ROSCA) — a federal law that requires companies to clearly disclose subscription terms and provide simple cancellation methods.

Specifically, the government claimed Adobe buried critical information about its “Annual, Paid Monthly” plan — the default option that locks customers into a year-long commitment. The early termination fee, which could run into hundreds of dollars, was hidden behind fine print, inconspicuous hyperlinks, and clickthrough text boxes that most users would never read.

“Adobe fails to adequately disclose to consumers that by signing up for the ‘Annual, Paid Monthly’ subscription plan, they are agreeing to a yearlong commitment and a hefty early termination fee,” the DOJ wrote in its complaint.

The lawsuit also targeted Adobe’s cancellation process itself. Anyone who tried to cancel was subjected to what the DOJ called “convoluted and inefficient cancellation processes filled with unnecessary steps, delays, unsolicited offers, and warnings.” Phone cancellations were reportedly even worse — customers had to repeat themselves to multiple representatives while facing “resistance and delay.”

If you’ve ever tried to cancel a Creative Cloud subscription, none of this will come as a surprise.

The $150 Million Settlement Breakdown

The settlement breaks down into two equal parts:

• $75 million in civil penalties paid directly to the Department of Justice
• $75 million in free services provided to affected customers — Adobe says it will proactively reach out to those who qualify once court filings are accepted

To put the number in perspective, $150 million represents roughly 0.6% of Adobe’s 2025 revenue. PetaPixel compared it to “the average American worker getting a speeding ticket.” Subscriptions accounted for 97% of Adobe’s $6.4 billion in revenue for the quarter ending February 2026, so these cancellation practices weren’t incidental — they were protecting the company’s core revenue engine.

What Changes Going Forward

Beyond the financial penalties, the settlement imposes specific requirements on Adobe’s subscription practices:

• Clear fee disclosure: Adobe must clearly disclose any early termination fee and how it’s calculated before enrolling customers in subscriptions
• Free trial transparency: For any free trial lasting longer than seven days, Adobe must remind customers before converting them into a paid subscription with an early termination fee
• Easy cancellation: Adobe must provide subscribers with easy ways to cancel their subscriptions

“American consumers deserve the right to make informed choices when deciding where to spend their hard-earned money,” said Assistant Attorney General Brett A. Shumate.

Adobe Denies Wrongdoing

In a statement on its website, Adobe maintained it did nothing wrong — a position that’s somewhat undermined by the $150 million it just agreed to pay.

“While we disagree with the government’s claims and deny any wrongdoing, we are pleased to resolve this matter,” the company said. Adobe also claimed it is “transparent with the terms and conditions” and has “a simple cancellation process.”

In the same breath, Adobe acknowledged it has “in recent years made our sign-up and cancellation processes even more streamlined and transparent” — essentially admitting the old process needed improving while denying it was ever problematic.

What This Means for Photographers

For the millions of photographers locked into Creative Cloud subscriptions for Photoshop, Lightroom, and other tools, this settlement has practical implications:

• If you were hit with unexpected fees: Adobe says it will proactively contact affected customers about the $75 million in free services. Keep an eye on your inbox.
• If you’re considering cancelling: The required changes should make the process significantly less painful going forward. Early termination fees must now be disclosed upfront, and the cancellation flow itself must be straightforward.
• If you’re on a free trial: Adobe must now send reminders before converting free trials into paid subscriptions with termination fees — no more silent auto-enrollment.

A Turbulent Week for Adobe

The settlement comes just one day after Adobe announced that CEO Shantanu Narayen is stepping down after more than 18 years leading the company. Adobe’s shares have been falling as investors grapple with concerns about how AI disruption will affect the company’s business.

Between the leadership change, the settlement, and growing competitive pressure from AI-powered alternatives, Adobe is facing a pivotal moment. For photographers evaluating their Creative Cloud subscriptions, the silver lining is that cancelling — if they choose to — should finally be a straightforward process.

Featured image: Photo by Sasun Bughdaryan on Unsplash.