WASHINGTON — The Federal Trade Commission (FTC) announced this week that it is seeking public comment on whether it should amend its Negative Option Rule to better address deceptive or unfair practices.
The announcement marks the latest step in the FTC’s effort to renew rulemaking concerning negative option plans, after a federal court last year vacated a “click to cancel” rule aimed at making it easier for consumers to cancel online subscriptions. That decision came after critics objected that the agency exceeded its authority and skirted procedural rules by failing to issue a preliminary regulatory analysis.
In January, the FTC submitted a draft Advance Notice of Proposed Rulemaking (ANPRM) concerning its Negative Option Rule to the Office of Information and Regulatory Affairs for review.
This week's announcement invites input on that ANPRM, stating, “The ANPRM asks the public: to weigh in on the current Rule; whether proposed amendments are needed; and about potential regulatory alternatives to address deceptive or unfair negative option practices.”
Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, explained the agency’s rationale for the proposed rulemaking.
“Negative option subscriptions can offer procompetitive features to consumers and the marketplace more broadly by lowering transaction costs and ensuring consumers receive uninterrupted service,” Mufarrige said. “The Commission’s enforcement track record suggests, however, that negative option subscriptions continue to be plagued by difficult cancellation processes, unlawful retention tactics, and a suite of other impediments that prevent consumers from easily switching or ending subscription services. Neither consumers nor competition are protected when consumers are enrolled in programs that they either do not want or cannot cancel.”
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 in 2024, the rule would have been applied to almost all negative option programs, including automatic renewal and free-to-pay offers. Had the update not been vacated, such changes would likely have required website operators to make substantial changes to sign-up and cancellation practices.
The current reinitiated process could lead to the FTC proposing the same or similar changes.
Now that the ANPRM has been published in the Federal Register, the comment period will be open until April 13. Members of the public can submit comments here.
