Adobe Lawsuit Settlement: $150M, Required Changes, and Exclusions

Adobe has agreed to pay $150 million to settle a federal lawsuit over hidden subscription cancellation fees and a cancellation process the government called deliberately obstructive. The Adobe lawsuit settlement, announced by the Department of Justice on March 13, 2026, splits evenly into a $75 million civil penalty paid to the government and $75 million in free services for affected customers. Adobe denied wrongdoing but agreed to the payment and to significant changes in how it sells and cancels subscriptions.¹

What the Settlement Pays and Who Gets It

The proposed stipulated order carries a total value of $150 million. Half is a civil penalty paid directly to the DOJ. The other half is $75 million in free services for qualifying customers affected by the practices at issue.¹

If you were affected, you do not need to file a claim. Adobe said it will “proactively reach out to the affected customers” once the court filings are accepted.² The specific form of those services and the precise eligibility criteria have not been publicly detailed. Reporting at the time of the announcement called it a “safe bet” that customers who had actually paid an early termination fee would be included, though the full scope was not spelled out.³

The proposed order also ends the government’s claims against two named individual defendants: David Wadhwani, president of Adobe’s digital media business, and Maninder Sawhney, senior vice president of digital go-to-market and sales. The settlement does not specify separate penalties for either executive beyond ending the case against them.⁴

What Adobe Was Accused Of

The DOJ filed the case on June 17, 2024, in the U.S. District Court for the Northern District of California, on referral from the FTC after a 3-0 commission vote. The complaint charged Adobe and the two executives with violating the Restore Online Shoppers’ Confidence Act, a 2010 federal law that requires online sellers to clearly disclose material subscription terms and provide a simple way to cancel recurring charges.⁵⁶

The central product at issue was Adobe’s “annual paid monthly” plan, which the government said was pre-selected as the default option when customers signed up for products like Photoshop and the wider Creative Cloud suite. The plan locked customers into a year-long commitment. The monthly price sat prominently on the page. The commitment period and a steep early termination fee were buried in fine print or hidden behind small hover-over icons.⁵

That early termination fee amounted to 50 percent of the remaining monthly payments on the annual plan, which could add up to hundreds of dollars. The government said Adobe used the fee as a “powerful retention tool” to keep subscribers paying when they wanted out.⁶

The cancellation flow itself drew heavy criticism in the complaint. Customers trying to cancel online were routed through numerous pages of warnings, delays, and offers meant to talk them out of finishing. Customers who called or used chat reported being transferred repeatedly, having calls dropped, and running into deliberate resistance. Some said Adobe kept charging them after they believed cancellation was complete.⁵

What Has to Change at Adobe

Beyond the money, the proposed order requires Adobe to change specific practices going forward:

Clearly disclose any early termination fee and how it is calculated before a customer enrolls in a subscription.
For free trials lasting more than seven days, notify customers before the trial converts into a paid subscription that carries an early termination fee.
Provide “easy ways to cancel” subscriptions, replacing the multi-step process described in the complaint.⁷

Adobe, in a public statement issued the day of the announcement, disagreed with the government’s claims and denied any wrongdoing, but said it was “pleased to resolve this matter.” The company said it is “transparent with the terms and conditions of our subscription agreements” and has a “simple cancellation process,” adding that it had already made its sign-up and cancellation flows “even more streamlined and transparent” in recent years.²

Is It Final Yet?

Not quite. The proposed stipulated order has been filed with the court but still requires a judge’s entry to take effect. The DOJ announcement was issued March 13, 2026, and last updated March 16, 2026. No objections have been publicly reported.¹ The settlement’s terms become binding only after final court approval.⁸ Until then, Adobe’s outreach to affected customers has not begun.

What This Settlement Does Not Cover

This is the federal government’s case only. Several private class actions raising overlapping allegations under California consumer protection laws remain separate matters, and the court orders in those cases do not reference the DOJ deal.

Singh v. Adobe Inc., the earliest of them, was dismissed in part in July 2025, with two plaintiffs ordered to arbitration, and remained active as of April 2026.⁹ Wohlfiel v. Adobe Inc. (later Marquez v. Adobe Inc.), filed August 4, 2025, was dismissed on March 31, 2026, on pre-litigation notice grounds, with the court also finding Adobe’s arbitration agreement and class action waiver enforceable because they included an opt-out; plaintiffs had until April 21, 2026, to amend.¹⁰ A third suit, Foret v. Adobe, was pending in the Northern District of California and challenged Adobe’s dispute-resolution scheme directly.¹¹

None of the private class actions have been reported as resolved by the DOJ settlement. If you want money back for an early termination fee you paid, the federal deal’s $75 million in free services is the pool tied to this case; the private actions are running on their own tracks and their own timelines.

1
U.S. Department of Justice. Adobe Agrees to $150 Million Settlement and Injunction to Resolve Alleged Violations of Restore Online Shoppers’ Confidence Act
2
Adobe. Adobe Statement on DOJ Settlement
3
Ars Technica. Adobe Settles DOJ Cancellation Fee Lawsuit, Will Pay $75 Million Penalty
4
Digital Production. Adobe Settles US Case Over Cancel Terms
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Federal Trade Commission. FTC Takes Action Against Adobe and Executives for Hiding Fees and Preventing Consumers From Easily Cancelling
6
U.S. Department of Justice. United States Files Complaint Against Adobe and Two Adobe Executives for Alleged Violations of Restore Online Shoppers’ Confidence Act
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U.S. Department of Justice. Adobe Agrees to $150 Million Settlement – USAO Northern District of California
8
CNBC. Adobe to Pay $75 Million to Resolve Lawsuit
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Bloomberg Law. Adobe Defeats Consumers’ Deceptive Subscriptions Suit, for Now
10
Courthouse News Service. Order in Marquez et al. v. Adobe Inc.
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Mondaq. New Class Action Targets Adobe’s Dark Pattern Subscription Practices