FTC seeks public comment on potential changes to Negative Option Rule

The ANPRM (which is requests public comment on whether, and how, the FTC should modernize its decades old Rule Concerning the Use of Prenotification Negative Option Plans (otherwise known as the Negative Option Rule). Among other things, the FTC seeks input on:

• The prevalence, structure, and typical operations of negative option marketing programs
• Practices that limit consumer understanding of negative option offers
• Whether and how current practices adequately ensure that consumers are providing express informed consent to negative options
• How cancellation mechanisms operate, including whether consumers encounter barriers or deterrents to cancelling enrollments
• Ways to address unfair and deceptive negative option practices, including whether regulatory alternatives (such as consumer or business education) could effectively address problematic practices

The state of play

Currently, the Negative Options Rule applies only to limited “prenotification” plans: programs where a seller offers goods to consumers who have enrolled in certain programs, sending those goods and charging for them unless consumers decline the offer. The current Rule is focused on traditional continuity programs (e.g., the mail order music CD and tape clubs marketed in the late 20th century). The Rule does not apply to modern subscription models such as streaming services or free-to-paid trial programs.

Given the Rule’s limited scope, the FTC has relied on other statutory authorities to take action against alleged deceptive subscription practices. Such authorities have included Section 5 of the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA). In the last few years, the FTC has aggressively challenged subscription practices it views as deceptive or unfair due to misleading free trials, hidden auto-renewals, dark-pattern enrollment flows, and difficult cancellation processes.

• Vonage (2022): The FTC secured $100 million in consumer refunds, resolving allegations that Vonage made it difficult for consumers to cancel subscriptions and continued to charge customers after cancellation attempts.
• Amazon (2023): The FTC sued Amazon alleging use of deceptive design practice to enroll users in Prime subscriptions while making cancellation difficult.
• Adobe (2024): The FTC alleged that Adobe failed to clearly disclose early termination fees associated with subscription plans and made cancellation unduly complicated.
• Instacart (2025): Instacart agreed to issue $60 million in refunds to consumers, settling allegations that Instacart deceived consumers, including by failing to disclose to consumers signing up for a free trial that they would automatically be enrolled in a subscription program.

This last enforcement action demonstrates that the FTC scrutiny of negative option practices is not a purely partisan issue.

This new rulemaking effort comes after the U.S. Court of Appeals for the Eighth Circuit vacated the FTC’s 2023 efforts to amend the Negative Option Rulle, holding that the FTC failed to conduct required regulatory analyses and address reasonable alternatives. This ANPRM may very well be part of an FTC efforts to address the procedural gaps on course to amending the Rule.

Companies that rely on subscription models or recurring billing may wish to take this opportunity to help inform the rulemaking process.

Authored by Meryl Bernstein, W. James Denvil, Pat Bruny, and Lorea Mendiguren.