Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC seeks comment on negative option marketing practices, (Mar 12, 2026)

By George Basharis, J.D.

Agency asks whether existing rule should be expanded to address automatic renewals, trial conversions, and other subscription practices that may enroll consumers without clear consent or make cancellation difficult.

Recurring subscription practices that automatically charge consumers unless they actively cancel remain a persistent source of consumer complaints, prompting the FTC to seek public input on whether its existing regulations should be expanded to address deceptive or unfair negative option marketing. The agency announced that it is opening a new rulemaking inquiry to examine how such programs operate across industries and whether additional safeguards are needed to ensure consumers understand enrollment terms and can easily cancel recurring charges.

The request for comment, issued through an advance notice of proposed rulemaking, asks businesses, consumer advocates, and researchers to provide data on how negative option programs function in practice and whether current legal protections adequately address misleading disclosures, unauthorized enrollment, or barriers to cancellation. The FTC also is seeking evidence on possible regulatory approaches, including whether to amend the existing rule or adopt alternative measures to curb abusive practices.

Subscription marketing under scrutiny. Negative option marketing refers to sales arrangements in which a consumer’s silence or failure to take action is treated as consent to be charged for goods or services. The practice is widely used in subscription businesses, including product delivery clubs, streaming services, and trial offers that convert to paid subscriptions if the consumer does not cancel before the end of a promotional period.

Such programs can offer convenience and continuity of service. However, regulators say the same structure can create consumer harm when companies fail to clearly disclose the terms of enrollment or impose obstacles that make it difficult to terminate recurring payments.

According to the FTC, the agency continues to receive thousands of complaints each year about negative option programs. Over the past five years alone, the agency recorded more than 100,000 complaints related to these practices, including reports that consumers were billed without their consent or faced significant hurdles when attempting to cancel subscriptions.

Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said subscription models can provide legitimate benefits but remain susceptible to misuse.

“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.”

Scope of the existing rule. The FTC’s current Negative Option Rule dates to 1973 and addresses a narrow form of subscription marketing known as prenotification plans. Under those arrangements, sellers send consumers advance notices offering merchandise and ship the goods unless the consumer declines the offer within a specified period.

The rule requires companies using such plans to clearly disclose material terms before consumers enroll. These disclosures include information about minimum purchase obligations, cancellation rights, billing practices, and the procedures consumers must follow to reject merchandise shipments.

While the rule applies to traditional product-of-the-month clubs and similar programs, the FTC notes that it does not cover many modern subscription practices. Continuity programs, automatic renewals, and free-to-pay trial conversions all fall outside the rule’s existing scope even though they now represent a substantial share of subscription marketing.

As a result, the current regulatory framework relies on a combination of statutes and rules that address specific contexts. These include the Restore Online Shoppers’ Confidence Act, which governs online transactions involving negative option features, and the Telemarketing Sales Rule, which regulates telemarketing offers that rely on similar billing arrangements. The FTC also relies on its general authority under Section 5 of the FTC Act to challenge unfair or deceptive practices in negative option marketing.

Patchwork protections. In the advance notice, the FTC said the existing legal framework may not provide a consistent set of standards across different media or subscription models. For example, ROSCA applies only to internet transactions, while the Telemarketing Sales Rule applies only to telephone solicitations. Negative option offers delivered through other channels may fall outside those regimes.

The agency said this fragmented approach can leave both businesses and consumers without clear guidance on how subscription programs should operate. Complaints received by the agency suggest the problem persists. The FTC reported that the rate of negative option complaints has increased from at least 33 per day in late 2020 to more than 90 per day in 2025. The complaints span dozens of industries and hundreds of companies operating across all 50 states.

The agency also continues to pursue enforcement actions alleging unlawful subscription practices. Recent cases have targeted companies accused of enrolling consumers without informed consent, obscuring the terms of “free” trials, or imposing cancellation procedures that require multiple steps or extended wait times.

Previous rulemaking setback. The current inquiry follows a prior attempt by the FTC to update the rule governing negative option marketing. In 2024, the FTC adopted amendments that would have expanded the rule to cover all forms of negative option marketing across different media. The revised regulation would have prohibited misrepresentations related to subscription offers, required clear disclosures of material terms before billing information is obtained, mandated express consumer consent before charging accounts, and required sellers to provide simple cancellation mechanisms.

The amended rule was scheduled to take effect in early 2025, with some compliance obligations delayed until later that year. However, the U.S. Court of Appeals for the Eighth Circuit vacated the rule in July 2025 after finding that the FTC had failed to conduct a required preliminary regulatory analysis under the FTC Act. That ruling reinstated the earlier 1973 rule and prompted the agency to reopen the regulatory process to develop a more comprehensive evidentiary record.

Questions for industry and consumers. Through the new advance notice, the FTC is asking for detailed information about how negative option programs operate in the marketplace. Among other topics, the FTC is seeking data on the number of subscription enrollments, the industries that rely on such marketing practices, and the amount consumers spend on recurring programs. The agency also asked for information about how long it takes consumers to enroll in and cancel subscriptions, as well as how frequently consumers attempt to cancel but are unable to complete the process.

The FTC also invited comment on specific practices that may raise consumer protection concerns. These include marketing techniques that obscure the existence of recurring charges, enrollment methods that fail to obtain express informed consent, and retention strategies that delay or discourage cancellation requests.

The agency additionally requested feedback on so called “save” attempts, in which businesses offer discounts or other incentives to persuade consumers not to cancel subscriptions. The FTC asked commenters to provide data on how often consumers accept such offers and whether they affect competition in subscription markets.

In evaluating potential regulatory approaches, the FTC said it will consider both the costs and benefits of possible reforms. Options could include amending the existing rule, adopting provisions similar to the vacated 2024 rule, or relying on nonregulatory measures such as consumer and business education initiatives.

Comment period. Once the advance notice is published in the Federal Register, members of the public will have 30 days to submit comments electronically or by mail following the instructions included in the notice. The FTC said supporting data, economic studies, and other empirical evidence will be particularly helpful in assessing whether additional regulatory action is warranted.

The agency said the new inquiry is intended to update the evidentiary record and determine whether rulemaking is necessary to address subscription marketing practices that may enroll consumers in programs they did not intend to purchase or make it difficult to terminate recurring charges.

News: ConsumerProtection FederalTradeCommissionNews