Shutterstock’s $35 Million FTC Settlement Puts Subscription Traps In The Spotlight

Shutterstock will pay $35 million to settle U.S. Federal Trade Commission allegations that it misled customers about subscription terms, auto-renewals, cancellation fees, and cancellation processes tied to its stock media licensing plans.
 

TL;DR

• Shutterstock will pay $35 million to settle FTC charges over billing and cancellation practices.
• The FTC alleged the company failed to clearly disclose auto-renewals and cancellation fees.
• The proposed order requires clearer subscription terms, informed consent, and simple cancellation mechanisms.

Shutterstock Faces FTC Action Over Subscription And Cancellation Practices

Shutterstock, the New York-based online platform known for licensing stock photos, graphics, videos, and music clips, has agreed to pay $35 million to settle allegations from the U.S. Federal Trade Commission.

The settlement centers on claims that Shutterstock made tens of millions of dollars through unfair and deceptive subscription practices. According to the FTC, the company failed to properly inform customers about key terms tied to annual subscription plans and on-demand content packs.

The FTC said the payment will provide full relief to consumers affected by Shutterstock’s billing and cancellation practices.

Since at least 2020, Shutterstock has offered most of its content through online subscriptions, giving users access to download a set number of digital assets each month while retaining licenses for a specific period.

However, the agency alleged that the company did not clearly disclose important terms before customers were charged.

FTC Says Shutterstock Hid Key Auto-Renewal And Cancellation Terms

A major part of the FTC’s complaint focused on Shutterstock’s on-demand packs, which were advertised as “Best for a one-time project” and “no commitment.”

The FTC alleged that these packs renewed automatically when the final download in the pack was used. Until early 2024, the agency said they also renewed automatically after one year.

The complaint also pointed to Shutterstock’s annual paid monthly subscription flow on desktop. The FTC alleged that the company frequently failed to clearly explain material terms, including annual auto-renewals and the fees customers would face for canceling before the end of the term.

Instead, the agency said these details were often buried in hard-to-find fine print.

“Subscription and negative option features can be beneficial for both companies and consumers, making renewal simpler and streamlining payment processes,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “But these benefits depend critically on firms clearly disclosing material terms, securing express and informed consent before charging consumers, and ensuring cancellation is a straightforward and simple process.”
 

FTC Alleges Shutterstock Made Cancellations Needlessly Difficult

The FTC’s complaint accused Shutterstock of three main violations: failing to clearly disclose material terms before billing, failing to obtain express informed consent, and failing to provide a simple way for users to cancel subscriptions.

Before 2024, the FTC said customers could not complete early cancellations online. Instead, they had to contact customer support through phone, chat, or email, a process the agency described as complicated and time-consuming.

This made the case not only about subscription pricing but also about how digital businesses design cancellation flows.

The proposed order prohibits Shutterstock from misrepresenting material subscription terms. It also requires the company to clearly disclose renewal terms, cancellation fees, and other key details before charging customers.

Shutterstock must also obtain consumers’ express informed consent for charges and maintain simple cancellation tools for negative option features.
 

What The $35 Million Shutterstock Settlement Means For Digital Subscriptions

The FTC’s action adds to growing scrutiny around subscription-based digital services, particularly those that use auto-renewals, cancellation fees, or renewal triggers that customers may not expect.

For customers, the settlement could bring relief tied to past billing and cancellation issues. For digital platforms, it sends another warning that subscription convenience cannot come at the cost of transparency.

The Commission voted 2-0 to authorize staff to file the complaint and proposed order. The case was filed in the U.S. District Court for the Southern District of New York.

If approved and signed by the District Court judge, the stipulated final order will carry the force of law.