Adobe agrees to $150 million settlement over cancellation policy

Adobe has agreed to a $150 million settlement over a dispute about it burying cancellation fees in fine print and making it too difficult for customers to cancel their subscriptions (if you're looking for a Photoshop alternative, we have plenty in our list).

The order, filed last week, requires Adobe to pay £75 million in fines to the Justice Department and provide an additional $75 million in free services to affected customers.

According to the complaint, Adobe's annual subscription plan enrolled people in a year-long commitment without making that clear. Also, the early termination fee was apparently hidden behind "fine print and inconspicuous hyperlinks" and only became properly revealed when a subscriber tried to cancel.

According to IBT, an Adobe executive described the early termination fee as a "bit like heroin for Adobe", suggesting they had come to rely on it as a source of income.

The nature of the cancellation process was also in dispute, with the government saying it was deliberately complicated and full of "unnecessary steps, delays, unsolicited offers and warnings".

So what now? Well Adobe is now required to make its early termination fees more obvious when a person signs up, it also needs to send a reminder to customers who are about to convert from a free trial to a subscription, if that subscription involves an early termination fee, and it must make unsubscribing straightforward.

Adobe said in a statement: "While we disagree with the government’s claims and deny any wrongdoing, we are pleased to resolve this matter. We have agreed to provide $75 million worth of services for free to customers that qualify.

"We will proactively reach out to the affected customers once the appropriate filings with the Court are made and accepted. Additionally, we have agreed to a $75 million payment to the Department of Justice."

For more on Adobe, see our Adobe software list, which outlines all the different apps and what they do.