Adobe Settles US Lawsuit with $150 Million Payment
Adobe, the maker of Adobe Photoshop and Adobe Acrobat, has settled a lawsuit filed by the US government by agreeing to pay $150 million in penalties. The information was disclosed in a statement by the United States Department of Justice on Friday (13 March), according to Reuters.
In a lawsuit filed in June 2024 by the Department of Justice and the Federal Trade Commission, Adobe was accused of concealing large fees associated with its “annual paid monthly” subscription plan and making the subscription cancellation process complicated. These fees sometimes reached hundreds of dollars and were allegedly hidden in fine print or behind text boxes.
Adobe was also accused of violating the Restore Online Shoppers’ Confidence Act enacted in 2010 to safeguard the interests of online consumers. Under this law, companies are prohibited from charging customers through automatic subscription renewals without clear information and customer consent.
Under the settlement, Adobe will pay $7.5 million in penalties and provide an additional $7.5 million worth of free services to customers. The cases against two executives associated with the allegations against the company have also been resolved.
In a statement, Brett Shumate, head of the Civil Division of the Department of Justice, said, “American consumers have the right to make informed decisions when deciding where to spend their hard-earned money.”
Adobe, however, has denied the government’s allegations. In a statement posted on its website, the company said it has made the sign-up and cancellation processes simpler and more transparent in recent years. Adobe added, “We disagree with the government’s claims and deny any wrongdoing, but we are pleased to have resolved the matter.”
Meanwhile, Adobe’s Chief Executive Officer Shantanu Narayen has announced that he will step down after serving in the role for more than 18 years. The company’s share price has declined this year, reflecting investor concerns about how Artificial Intelligence (AI) may affect Adobe’s business prospects.
DBTech/BMT/OR
