WASHINGTON — The Federal Trade Commission has invited public comments on a petition to renew trade regulation rulemaking concerning negative option plans, after a federal court previously vacated a “click-to-cancel” rule aimed at making it easier for consumers to cancel online subscriptions.
Earlier this month, the FTC received and posted a petition for rulemaking from the Consumer Federation of America and the American Economic Liberties Project. The public comment period on the petition will last until Jan. 2.
After the FTC announced its proposed changes in March 2023, the commission received more than 16,000 comments from consumers, government agencies, consumer groups, and trade associations.
As XBIZ reported in July, the U.S. Court of Appeals for the 8th Circuit vacated the FTC’s updated Negative Option Rule pending further review, after critics objected that the agency exceeded its authority and skirted procedural rules by failing to issue a preliminary regulatory analysis.
The Negative Option Rule was originally adopted in the 1970s to protect consumers from being automatically enrolled in subscription plans without their consent. As amended, the rule would have been applied to almost all negative option programs, including automatic renewal and free-to-pay offers. Such changes would likely have required website operators to make substantial changes to sign-up and cancellation practices.
The current petition could signal the beginning of the “further review” mandated by the appeals court and could lead to the FTC proposing the same or similar changes, while presumably addressing procedural issues raised during the previous cycle.
