Shutterstock pays $35M over subscriptions

Shutterstock is paying a $35 million fine to settle FTC allegations that it used illegal dark patterns to make subscriptions difficult to cancel.

Shutterstock has agreed to a $35 million settlement with the Federal Trade Commission (FTC) over allegations of illegal subscription practices. The FTC's complaint stated that the stock media company used deceptive "dark patterns" to make it excessively difficult for customers to cancel their subscriptions. These tactics allegedly included hiding cancellation options behind confusing menus, requiring users to click through multiple pages, and surprising them with substantial early termination fees. The agency argued that these practices violated the Restore Online Shoppers’ Confidence Act (ROSCA) by failing to provide a simple and clear mechanism for users to stop recurring charges.

This settlement is a critical reminder for all businesses operating on a subscription model. It signals intensified regulatory focus on user experience design and consumer rights. For founders, developers, and CTOs, the case emphasizes that prioritizing user retention through obscure or difficult cancellation flows is a high-risk strategy that can attract legal action. The financial penalty and required business practice changes demonstrate that regulators are willing to impose significant consequences. Companies should review their own subscription and cancellation processes to ensure they are transparent, straightforward, and fully compliant with consumer protection laws.

The FTC's action against Shutterstock is a major warning to all subscription-based businesses about the legal risks of using 'dark patterns' and difficult cancellation processes.

Companies using subscription models face increased regulatory risk and potential for heavy fines if their cancellation processes are not clear and simple. This may require auditing and redesigning user flows to ensure compliance and avoid reputational damage.