Shutterstock has settled with the Federal Trade Commission (FTC) for $35 million amid claims that the company misrepresented key terms of its subscription services and imposed unfair cancellation hurdles. The photo licensing platform faced allegations that it failed to clearly disclose automatic renewal policies tied to its on-demand packs, which were promoted as ideal for one-time projects without ongoing commitments.
The FTC charged Shutterstock with deceiving consumers by not making it explicit that subscriptions would automatically renew after the final download or after a year. Customers seeking to cancel reported facing prolonged wait times on phone lines, numerous email exchanges, and having to navigate extensive documentation. Additionally, users on annual, prepaid monthly plans encountered significant cancellation fees that were not properly disclosed at the time of subscription.
Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, emphasized that while subscription models can benefit both companies and customers by simplifying renewals and payments, transparency and easy cancellation procedures are essential. He stated that the FTC’s enforcement targets companies that overlook these principles, which ultimately restrict consumers’ ability to make informed decisions and reduce competition in digital markets.
Though Shutterstock agreed to the settlement sum, the company neither admitted nor denied wrongdoing and has not issued a public statement regarding the case. The funds from the settlement will be allocated to fully compensate affected consumers. As part of the agreement, Shutterstock must clearly disclose all material terms of its subscription offerings going forward.
This development comes amid Shutterstock’s ongoing acquisition process by Getty Images, valued at $3.7 billion. While U.S. regulators approved the merger, the U.K.’s Competition and Markets Authority has insisted that Shutterstock divest its editorial business to complete the deal.