Shutterstock will pay $35 million to settle Federal Trade Commission allegations that it made tens of millions of dollars from illegal subscription and cancellation practices, the FTC announced Wednesday.
The FTC accused Shutterstock of misleading consumers for years about its subscriptions and making it difficult to cancel. In one instance, the company promoted “free” trials but failed to adequately disclose that these trials later turned into annual plans that could only be cancelled with a hefty fee.
Shutterstock’s subscriptions “have complicated and onerous terms that Defendant deceptively presents as simple,” and the company “fails to provide simple mechanisms to cancel its [annual paid monthly] plans,” the FTC alleged in a complaint.
“Subscription and negative option features can be beneficial for both companies and consumers, making renewal simpler and streamlining payment processes,” Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said in a prepared statement. “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.”
Last year, the FTC walked back its own rule meant to make it as easy for consumers to cancel a subscription as it is to sign up for one, but apparently, its ethos lives on at the agency. In this case, the FTC found Shutterstock to be in violation of other regulations, including the Federal Trade Commission Act and the Restore Online Shoppers’ Confidence Act.
Shutterstock did not respond to CX Dive’s request for comment prior to the time of publication.
Subscriptions can be a two-way street, benefiting both consumers and companies, but companies shouldn’t make a business out of trapping consumers in them, experts say.
“The most effective retention strategies are the ones that make customers want to stay, not feel like they have to,” Recurly Chief Customer Officer Rachel Sheriff said in an email to CX Dive. “As consumers become more selective about the subscriptions they keep, flexibility is becoming a much bigger part of the experience. That means giving subscribers options that fit changing needs and budgets, whether that’s pausing a subscription, switching plans, or downgrading instead of canceling altogether.”
Still, it may be tempting to do so, as subscriptions can be a massive revenue stream. For Shutterstock, subscriptions make up about half of its revenue — $103.8 million in the first quarter of 2026 out of total revenue of $199.2 million.
While Shutterstock’s cancellation processes have changed, prior to 2024, the company required customers to cancel by contacting customer support by phone, chat or email, even though consumers were able to sign up online with just a few clicks of a button.
When firms fail to disclose terms, secure informed consent and make it easy to cancel, “they deprive consumers of the ability to make informed choices, undermining consumer sovereignty and impeding competition,” the FTC said. “The Commission’s action today underscores its commitment to preserving consumer choice and facilitating competition in digital markets and subscriptions.”
How easy cancellations can actually boost enrollments
Research shows consumers want flexibility in their subscriptions — and are more likely to subscribe when it’s easy to cancel.
Consumers say a subscription that is “easy to cancel” is one of their top considerations when looking at subscriptions, with 95% saying it's moderately to extremely important, according to a Recurly survey. Meanwhile, brands that offer the option to “pause before cancel” saw pause usage increase by 337%.
To Sheriff, it shows that flexibility is no longer a last-ditch save tactic but a method for engagement and loyalty.
“The Shutterstock situation is a good reminder for companies to take a closer look at their subscription experiences, viewing them not just as a revenue driver, but as an important part of long-term customer relationship building,” she said. “Customers are much more likely to stay loyal to companies that make subscription management feel flexible and easy to navigate. In many ways, transparency and customer control are becoming just as important to retention as the product or service itself.”
