On March 11, the Federal Trade Commission (FTC) issued a new Advance Notice of Proposed Rulemaking (ANPRM) to revisit its Rule Concerning the Use of Prenotification Negative Option Plans. The move follows the Eighth Circuit’s 2025 decision vacating the FTC’s 2024 amendments (discussed here), which would have imposed uniform requirements on subscriptions, auto‑renewals, and trial‑to‑pay offers across all marketing channels. The ANPRM makes clear that while the FTC acknowledges that so-called negative options are widely offered and can provide benefits to both sellers and consumers, the FTC intends to address recurring billing and cancellation frictions that continue to generate a high volume of consumer complaints.

Background

In the ANPRM, “negative option” is defined as any type of sales term or condition that allows a seller to interpret a customer’s silence as acceptance of an offer. The existing Negative Option Rule, first adopted in 1973, addresses only prenotification plans, e.g. “book‑of‑the‑month” style clubs, where consumers receive periodic notices and are billed for merchandise unless they decline within a set period. The existing Rule does not address continuity programs, automatic renewals, and free‑to‑pay trial conversions, often offered online or via apps. Consequently, the FTC has been relying on a patchwork of authorities — § 5 of the FTC Act, Restore Online Shoppers’ Confidence Act (ROSCA), the Telemarketing Sales Rule, the Electronic Fund Transfer Act, the Postal Reorganization Act, and numerous state auto‑renewal laws — to police perceived abuses in these programs such as inadequate disclosures, enrollment without consent, and difficult cancellation.

In 2024, the FTC attempted to unify these standards by expanding the Rule to all so-called negative option programs and codifying requirements around clear disclosures, express informed consent, and simple cancellation, but the Eighth Circuit vacated those amendments on procedural grounds, holding that the FTC had not conducted the preliminary regulatory analysis required by § 22 of the FTC Act. The ANPRM now seeks updated data and public input on whether, and how, the FTC should re‑propose a modernized rule.

Key Points

  • The ANPRM is aimed at determining whether the FTC should retain the current 1973 Rule as is, amend it to cover a broader range of negative option offerings, adopt some or all of the vacated 2024 provisions, or pursue non‑regulatory alternatives such as guidance and education.
  • The FTC emphasizes that current law is fragmented: the Negative Option Rule covers only prenotification plans, ROSCA covers internet sales, the Telemarketing Sales Rule governs telephonic sales, and other federal and state laws address particular payment methods or sectors, leading to inconsistent standards across channels.
  • The FTC cites persistent and growing consumer harm, noting thousands of annual complaints from all 50 states and recent enforcement actions against major brands, as evidence that unfair or deceptive negative option practices are “prevalent” within the meaning of the FTC Act’s rulemaking standard.
  • The agency is particularly concerned about practices that obscure the existence or cost of a so-called negative option, fail to clearly disclose material terms, enroll consumers without express informed consent, or make cancellation unduly difficult through limited channels, friction‑heavy processes, or aggressive “save” attempts that delay cancellation.
  • The ANPRM signals that the FTC is considering reviving core elements of the vacated 2024 rule, including: a broad prohibition on misrepresentations; a requirement for separate, verifiable consent to recurring charges; clear and conspicuous disclosures placed immediately adjacent to the consent mechanism; and a cancellation process that is at least as easy to use as the enrollment method.
  • The FTC is seeking detailed economic input on benefits and costs to both consumers and businesses, including current compliance burdens under existing law, incremental costs of any new requirements, differences by industry and firm size, and the role of third‑party service providers in enrollment, billing, and cancellation.
  • The FTC is also evaluating how to handle exemptions, asking whether certain industries, transaction types, or business models should be fully or partially exempt, whether exemptions should be time‑limited or conditioned, and what evidence petitioners should provide to justify relief from any new rule.

Comments on the ANPRM will be accepted for 30 days after publication in the Federal Register, which is scheduled to happen on March 13.