FTC Seeks Public Comment on Potential Update to Negative Option Rule

The Federal Trade Commission (FTC) is again considering whether to update its rule regulating cancellation of recurring subscription services. The agency is seeking public comment through an Advance Notice of Proposed Rulemaking regarding its Rule Concerning the Use of Prenotification Negative Option Plans (the Negative Option Rule). Comments are due by April 13, 2026.

The FTC last addressed the Negative Option Rule in 2024 when it made changes that would have prohibited misrepresentation of material facts related to the term of an auto-renewal, required clear and conspicuous disclosures and express informed consent of consumers to auto-renewal terms, and required a simple mechanism for cancelling a subscription through the same medium that was used to purchase it. The Eighth Circuit Court of Appeals vacated the new rule one week before it was to take effect. The Court found the FTC failed to follow proper legal procedures when it changed the rule.

The FTC is now seeking input on whether and how it should use its authority to again address negative option subscriptions, including whether to amend the current rule to address deceptive or unfair practices or, alternatively, publish additional consumer and business advisories on the practice.

In particular, the FTC is requesting information on:

1. Marketplace for negative option programs - how widely negative options are used and how these programs operate.
2. Potential unfair or deceptive practices - practices that (a) prevent consumers from understanding the terms of an automatic renewal, (b) result in enrollment in recurring subscriptions without express informed consent (that is, clear, informed agreement to the charges/terms), and/or (c) deter consumers from canceling recurring subscriptions, and whether such practices are prevalent.
3. Addressing unlawful practices - potential approaches, including retaining the current rule, adopting provisions of the vacated 2024 rule or other provisions, or using alternatives to regulation (such as education), along with the costs and benefits of each approach.
4. Supporting studies and data - market studies, economic data, or other empirical evidence to support comments.

The FTC’s revisiting of the Negative Option Rule signals the Commission’s ongoing concern with existing auto-renewal practices. Businesses should consider reviewing and re-evaluating their practices in anticipation of future changes.

If you would like to file comments or discuss Negative Option practices, contact Rebecca Jacobs Goldman in Lerman Senter’s Privacy, Data Protection, and Cybersecurity Practice Group.