CMA launches investigation into Adobe's early cancellation fees

The question

Why is the CMA investigating Adobe's subscription cancellation fees and when do such fees breach consumer protection law?

The key takeaway

The CMA has opened an investigation into whether Adobe’s early cancellation fees on its “Annual Contract, billed monthly” plans breach consumer protection law, using its strengthened powers under the Digital Markets, Competition and Consumers Act 2024 (DMCCA).

The background

On 19 March 2026, the CMA announced its investigation into Adobe's consumer subscription terms, focusing on the early termination fee for certain membership plans. Users can choose to opt for a 12‑month contract payable in monthly instalments. If they cancel more than 14 days after signing up, the consumer must pay 50% of the remaining yearly cost but will retain access to Adobe's products only until the end of that month’s billing period. 

Adobe is the ninth business to be investigated using the CMA’s new direct consumer enforcement powers under the DMCCA, which allow the regulator to determine breaches of consumer protection law itself (rather than needing to go to court to enforce) and impose fines itself. 

The development

The CMA is examining two main issues:

• whether Adobe’s cancellation fee terms are “unfair” under the Consumer Rights Act 2015 (CRA); and
• whether the way those terms are presented to consumers constitutes an unfair commercial practice by a misleading omission under the DMCCA.

In relation to the first issue, the CMA will consider whether the requirement for consumers to pay 50% of the outstanding annual cost amounts to “excessive compensation” for services not yet supplied. Contract terms which charge consumers "disproportionately high" sums for cancellation are "grey-listed" as potentially unfair under Schedule 2 of the CRA.

The CMA will also assess whether Adobe provides clear and timely information about the existence and level of the early termination fee at or before the point of sign‑up and whether the information is sufficiently prominent. Misleading omissions arise where material information is missing, or presented in an unclear or untimely way or is unlikely to be seen by the average consumer (Section 227(4), DMCCA). To be considered "unfair", the omission of information would have to cause the average consumer to make a decision that they otherwise would not have made.

The CMA has not yet reached any conclusions.

Why is this important?

This case is an early, high‑profile test of the CMA’s expanded direct enforcement powers under the DMCCA, including its ability to impose fines of up to 10% of global turnover for consumer law breaches.

This investigation falls in line with larger regulatory trends. It follows the CMA's announcement in April 2025 that it would be focusing on so-called "egregious practices" such as "those that impose unfair exit charges on consumers". It signals a particular concern about contract structures that look flexible but, in reality, lock users into long commitments with high penalties for leaving. 

It's also worth noting that the DMCCA does itself introduce specific rules designed to combat so called "subscription traps" like this Adobe one.  However, the relevant rules have not yet come into force (the government expecting the regime to commence in Spring 2027).  It is a signal of the CMA's concern with this sort of practice that it has opted to open a case on consumer subscriptions prior to the new law coming in.

Any practical tips?

Businesses should review cancellation fees and minimum‑term structures across all consumer‑facing subscription plans, especially “Annual Contract, billed monthly” or similar products. It is worth considering whether exit charges are linked to costs or discounts provided, and whether the CMA could characterise it as “disproportionately high” in relation to the length of service provided. Assessing whether alternative models (e.g. lower exit fees, pro‑rata refunds or shorter minimum terms) are suitable will reduce the risk of enforcement action.

Service providers should also review the key information provided to consumers upfront when signing up for subscription services. Termination fees should be clearly flagged in plain language and in a format that ensures they are likely to be seen (e.g. not buried in expandable links or low‑contrast text). Each of these factors will impact the CMA's assessment of whether a product or service is being sold in a misleading way.

Finally, businesses should scenario‑plan for CMA scrutiny and the new incoming subscription contract rules under the DMCCA. This includes maintaining record‑keeping on how pricing and cancellation terms are set, and any relevant consumer‑facing changes.

Summer 2026