The $150 Million Price of “Cancel”: Adobe Settles DOJ Lawsuit Over Subscription Practices Every Filmmaker Knows Too Well

Industry News

by Nino LeitnerMarch 16^th, 2026

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Adobe has reached a $150 million settlement with the U.S. Department of Justice over allegations that the company hid early termination fees from subscribers and made it unnecessarily difficult for customers to cancel their Creative Cloud subscriptions. The settlement, which still requires court approval, includes $75 million in civil penalties and $75 million in free services for affected customers.

For filmmakers and creative professionals who rely on Premiere Pro, After Effects, Photoshop, and the rest of Adobe’s Creative Cloud suite on a daily basis, the news brings into sharp focus a long-simmering frustration: the cost and complexity of Adobe’s subscription model. While the software itself remains an industry standard (we have covered Adobe’s tools extensively, from Premiere Pro updates to the company’s AI-powered Firefly platform and video coverage from the ground of Adobe MAX 2025 in LA), the business practices surrounding those subscriptions have been a consistent source of irritation for individual creators and small production companies alike.

What the government alleged

The case originated with the Federal Trade Commission (FTC), which took action against Adobe and two of its executives, Maninder Sawhney and David Wadhwani, before referring the matter to the DOJ. The government’s complaint, filed in the U.S. District Court for the Northern District of California in June 2024, alleged that Adobe violated the Restore Online Shoppers’ Confidence Act (ROSCA) by using fine print and inconspicuous hyperlinks to conceal key subscription terms.

At the heart of the complaint was Adobe’s “annual, paid monthly” subscription plan, which the company pre-selected as the default option during enrollment. While the monthly cost was prominently displayed, the government alleged that Adobe buried information about the early termination fee (ETF), which amounted to 50 percent of the remaining monthly payments if a customer canceled within the first year. For a subscriber on the Creative Cloud Pro plan at $69.99 per month, that could mean a cancellation fee of nearly $385 if they tried to leave in the first month.

Beyond the fee itself, the complaint described a cancellation process designed to discourage subscribers from following through. According to the government, customers who attempted to cancel online were forced to navigate multiple pages filled with unnecessary steps, unsolicited offers, and warnings. Those who called customer service reportedly encountered resistance, dropped calls, repeated transfers, and delays. Some consumers who believed they had successfully canceled later discovered that Adobe continued charging their credit cards.

The settlement terms

Under the proposed stipulated order, Adobe must pay $75 million in civil penalties to the DOJ and provide $75 million worth of free services to eligible customers. The company has said it will proactively contact affected subscribers once court filings are finalized. The FTC’s vote to refer the complaint was unanimous at 3-0.

Going forward, the settlement imposes several new requirements on Adobe. The company must clearly disclose any early termination fee and explain how it is calculated before enrolling customers in subscriptions. For free trials lasting longer than seven days, Adobe must now send a reminder to customers before converting them into paid subscriptions that carry an ETF. Adobe will also be required to provide simpler cancellation options.

The settlement does not eliminate the early termination fees themselves.

It is worth noting that the settlement does not eliminate the early termination fees themselves. Adobe is simply required to be significantly more transparent about them and to make the cancellation process less burdensome.

Adobe denies wrongdoing

Adobe issued a statement denying any wrongdoing while expressing satisfaction at resolving the matter. The company said it disagrees with the government’s claims but chose to settle to end the litigation. Adobe emphasized that its sign-up and cancellation processes have become more streamlined in recent years.

The timing of the settlement is notable. Adobe’s long-time CEO Shantanu Narayen stepped down from his position after 18 years leading the company, with the Board of Directors having already initiated a search for a successor. Adobe’s stock price dropped approximately 7.5% following the settlement announcement, and the company’s shares have fallen roughly 32% over the past 120 days.

Why this matters for filmmakers

To put the $150 million figure in perspective, it represents approximately 0.6 percent of Adobe’s $18.5 billion in annual revenue for 2025. For a company of Adobe’s scale, this is a manageable financial hit, not an existential one. But for individual filmmakers and small studios, the underlying issue resonates deeply.

Adobe’s shift to a subscription-only model after 2012 was, and remains, a divisive topic in the creative community. On one hand, the subscription model has enabled continuous updates and cloud-based features that would not have been possible under the old perpetual license structure. On the other hand, it means that freelance editors, colorists, and VFX artists are locked into recurring payments for tools they depend on professionally, with limited alternatives for certain applications like After Effects. As we noted in our coverage of Adobe’s upgrades to Premiere and After Effects, the Creative Cloud All Apps plan runs $59.99 per month, while competitors like Blackmagic’s DaVinci Resolve offer comparable functionality for free or as a one-time purchase.

A shifting competitive landscape

The settlement also arrives at a moment when the competitive landscape is shifting. Apple’s acquisition of Pixelmator (which we covered here) and the launch of Apple Creator Studio, a subscription bundle that includes Final Cut Pro, Logic Pro, and Pixelmator Pro for $12.99 per month, have introduced a credible alternative for many creators. As we explored in our exclusive interview with Apple about Creator Studio, Apple is maintaining one-time purchase options alongside its subscription, a pointed contrast to Adobe’s subscription-only approach. DaVinci Resolve continues to gain ground in professional post-production as well. Whether the DOJ settlement and the associated negative publicity accelerate any migration away from Adobe’s ecosystem remains to be seen.

A broader pattern

The Adobe case is not an isolated regulatory action. The settlement follows a similar case in which the FTC pursued Amazon over its Prime membership cancellation practices, resulting in a settlement of up to $2.5 billion. The pattern suggests that U.S. regulators are increasingly scrutinizing so-called “dark patterns,” the design choices that make it easy to sign up for subscriptions but difficult to leave them.

For the creative industry specifically, the implications go beyond Adobe. Any software company relying on subscription revenue and annual commitments should be paying attention. Transparency in pricing and ease of cancellation are no longer optional courtesies; they are becoming legal requirements.

The Adobe DOJ settlement still requires approval from a federal judge. Have you ever been caught off guard by Adobe’s early termination fees, or do you consider the annual plan a reasonable trade-off for lower monthly costs? With Apple Creator Studio and DaVinci Resolve gaining ground, is this the kind of news that would push you to reconsider your editing ecosystem? Don’t hesitate to let us know in the comments below!