FTC Hits Shutterstock With $35 Million Settlement Over Subscription & Cancellation Practices

Key Takeaways

• FTC Targets Subscription Practices: The FTC alleged Shutterstock used deceptive billing and renewal practices tied to its subscription and on-demand content offerings.
• Auto-Renewals Under Scrutiny: Regulators said Shutterstock failed to clearly disclose that some “one-time project” content packs automatically renewed after downloads were used or after one year.
• Cancellation Process Drew Complaints: Before 2024, consumers allegedly could not complete early cancellations online and instead had to go through customer support channels.
• $35 Million Consumer Relief Fund: Shutterstock agreed to pay $35 million, which the FTC said will be used to provide relief to affected consumers.

Deep Dive

The Federal Trade Commission has announced a $35 million settlement with Shutterstock, accusing the online licensing platform of quietly locking consumers into recurring charges while making it unnecessarily difficult to cancel subscriptions.

The case comes at a moment when regulators are taking a far more aggressive view of subscription design practices across digital commerce, particularly around auto-renewals and so-called “negative option” programs where silence or inaction is treated as consent to keep paying. In Shutterstock’s case, the FTC alleged the company crossed the line from convenience into deception.

According to the agency, Shutterstock failed to clearly disclose key subscription terms, charged consumers without obtaining proper informed consent, and created cancellation processes that were cumbersome enough to trap users in plans they no longer wanted.

The company, best known for licensing stock photos, videos, graphics, and music clips, has relied on subscription offerings since at least 2020. Consumers could sign up through Shutterstock’s website or through online advertisements promoting specific plans and products. Those offerings included annual paid-up-front subscriptions, annual paid monthly plans, and on-demand content packs designed for limited use projects.

But regulators said many consumers were not getting the straightforward experience the marketing suggested.

The FTC’s complaint pointed specifically to Shutterstock’s on-demand packs, which were advertised as being “Best for a one-time project” with “no commitment.” According to the agency, Shutterstock failed to adequately disclose that the packs automatically renewed once the final download in the pack was used. Until early 2024, the FTC alleged, those packs also automatically renewed after one year.

The complaint also focused heavily on the company’s annual paid monthly subscription flow on desktop devices. Regulators alleged Shutterstock frequently failed to clearly disclose critical terms, including that subscriptions would automatically renew at the end of the year and that consumers could face cancellation fees if they attempted to terminate plans early. The FTC said those details were often buried in fine print that consumers could easily overlook during enrollment.

“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.”

The FTC said Shutterstock violated federal consumer protection rules  by failing to clearly disclose material subscription terms before billing consumers, failing to obtain express informed consent before charging customers’ payment methods, and failing to provide simple cancellation mechanisms.

According to the complaint, consumers seeking to cancel subscriptions before 2024 often could not complete the process online. Instead, they were required to contact customer support through phone, chat, or email channels that the agency described as time-consuming and unnecessarily complicated.

The proposed order would also impose a series of operational requirements on the company going forward. Shutterstock would be prohibited from misrepresenting material terms tied to subscriptions and would be required to clearly disclose important terms, obtain consumers’ express informed consent before charging them, and maintain simple cancellation mechanisms for subscription services and other negative option features.

The action adds to a growing wave of regulatory scrutiny aimed at digital subscription businesses whose revenue models depend heavily on recurring billing. Regulators in recent years have increasingly zeroed in on whether companies make subscriptions easy to start but intentionally difficult to end, which is a practice consumer advocates and enforcement agencies argue can distort consumer choice and undermine fair competition.

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