On May 13, 2026, the Federal Trade Commission filed a civil complaint against Shutterstock, Inc. in the United States District Court for the Southern District of New York,…
On May 13, 2026, the Federal Trade Commission filed a civil complaint against Shutterstock, Inc. in the United States District Court for the Southern District of New York, alleging violations of Section 5 of the FTC Act and the Restore Online Shoppers' Confidence Act (ROSCA). The same day, the parties reached an agreement in principle under which Shutterstock will pay $35 million to resolve the FTC's allegations. The action is the latest in a series of high-profile enforcement matters targeting subscription-based business models, and it offers an important warning for any company that relies on recurring-charge offerings.
ROSCA imposes specific obligations on businesses that sell goods or services through negative-option features online. Among other things, the statute requires sellers to clearly and conspicuously disclose all material terms of the transaction before obtaining a consumer's billing information, to secure the consumer's express informed consent before charging the account, and to provide a simple mechanism to stop recurring charges. Allegations that a business has failed to satisfy any of these requirements can give rise to substantial civil penalties, consumer redress, and injunctive relief, as the Shutterstock settlement illustrates.
The size of the Shutterstock payment underscores the significant financial exposure that ROSCA noncompliance can create, even for well-established companies with sophisticated e-commerce operations. The matter also reflects the FTC's continued prioritization of subscription and auto-renewal practices, an area the agency has repeatedly identified as a source of consumer harm. Companies offering monthly or annual plans, free trials that convert to paid subscriptions, or other recurring-charge structures should expect that enforcement attention in this space will remain elevated.
In light of this development, subscription businesses are well advised to conduct a fresh review of their enrollment flows, pre-checkout disclosures, consent mechanisms, and cancellation pathways. Particular attention should be paid to whether material terms are presented clearly and conspicuously, whether consent is genuinely express and informed, and whether customers can cancel as easily as they signed up. Documenting compliance decisions and periodically testing the user experience can help reduce risk before it materializes in an investigation.
This article is provided for general informational purposes only. Clients facing specific questions about ROSCA compliance or FTC enforcement risk should seek tailored legal advice.