Shutterstock to Pay $35M in FTC Case Over Subscription Cancellations
Shutterstock will pay $35 million to resolve FTC allegations that it misled customers on subscription renewals and complicated plan cancellations. The action follows claims that the company obscured auto-renewal terms and imposed cancellation barriers, and requires Shutterstock to improve disclosure and simplify cancellation procedures.
1. Lawsuit and Allegations
The FTC sued Shutterstock alleging the company failed to clearly disclose subscription auto-renewal terms and made cancellation processes opaque. Customers reportedly encountered hidden fees and were unable to easily terminate plans, prompting regulators to seek injunctive relief.
2. Settlement Details
Under the settlement, Shutterstock will pay $35 million and must implement enhanced disclosures, provide clear renewal notifications and offer a one-click cancellation option. The agreement also bars deceptive practices, with compliance reviews spanning several years.
3. Business and Financial Impact
The $35 million charge will reduce free cash flow for the current quarter and may pressure margins in the near term. Required changes to subscription management could alter churn rates and customer acquisition costs, weighing on revenue growth forecasts.