Adobe has agreed to a $150m settlement with the US Department of Justice to resolve allegations that it did not clearly disclose termination fees and complicated the cancellation process for its subscription services.

The agreement requires Adobe to pay a $75m civil penalty and provide another $75m in free services to customers, pending court approval.

The Justice Department and Federal Trade Commission filed a complaint in June 2024, asserting that Adobe obscured information about early termination fees on its “annual paid monthly” subscription plan, reported Reuters.

These fees could reach hundreds of dollars and were often hidden in fine print or placed behind hyperlinks and text boxes.

Authorities also claimed that Adobe made it difficult for customers to cancel subscriptions, requiring multiple steps online or repeated interactions with customer service representatives when cancelling by phone.

The complaint stated that these practices violated the Restore Online Shoppers’ Confidence Act, which mandates that companies offering online subscriptions must clearly disclose key terms and provide straightforward cancellation options before charging customers.

US Department of Justice Civil Division head Assistant Attorney General Brett Shumate said: “American consumers deserve the right to make informed choices when deciding where to spend their hard-earned money. The Justice Department will strongly oppose any attempt to harm Americans with deceptive and unfair business practices.”

The settlement also addresses claims against two Adobe executives named in the government’s action.

As part of the proposed order, Adobe will need to inform customers about early termination fees and how they are calculated before enrolment.

For free trials longer than seven days, the company must notify users before switching them to a paid plan with a termination fee.

Adobe is also required to offer easier methods for cancelling subscriptions.

In response, Adobe stated on its website that it has recently taken steps to simplify its sign-up and cancellation processes.

The company denied any wrongdoing but welcomed an end to the proceedings. Subscriptions represented 97% of Adobe’s $6.4bn revenue for the quarter ending 27 February.