- Adobe’s 2024 lawsuit will soon be settled, at the cost of a $150 million settlement
- Customers get $75 million worth of free services as a result
- Adobe disagrees with the allegations, but is happy to settle the case
The US Department of Justice has filed a motion to settle a lawsuit against Adobe and two of its executives — Maninder Sawhney and David Wadhwani — over alleged deceptive subscription practices.
The $150 million settlement is split equally into two parts – $75 million in civil penalties and an additional $75 million in free services to customers.
The allegations (according to the Justice Department) allege that Adobe’s practices violated the Restore Online Shoppers’ Confidence Act (ROSCA), which “generally requires companies that offer online subscriptions to clearly disclose important subscription information and provide subscribers with simple ways to cancel.”
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Adobe’s $150m settlement
The lawsuit alleges that Adobe compromised key subscription information, including early termination fees, by using “small print and inconspicuous hyperlinks.” Early termination fees for Adobe’s annual plans can reportedly run into the hundreds of dollars.
In addition to hiding some details, regulators also alleged that Adobe made cancellations difficult through complex processes, including multiple web pages, phone cancellations and delays.
In addition to coughing up $150 million, Adobe must also clearly disclose early termination fees and how they are calculated prior to enrollment. The company has also been instructed to remind users before their free trials become paid plans, giving them simpler ways to cancel.
However, the settlement has not yet been confirmed and is awaiting court approval.
“American consumers deserve the right to make informed choices when deciding where to spend their hard-earned money,” wrote Assistant Attorney General Brett A Shumate.
“While we disagree with the government’s allegations and deny any wrongdoing, we are pleased to resolve this matter,” Adobe added in a statement. “We are transparent with the terms and conditions of our subscription agreements, have a simple cancellation process and clearly disclose the details of our plans.”
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