Public Comments Now Open: FTC Proposes Major Expansion Of Negative
Option Rule, Including New "Click To Cancel" Requirements For Recurring Subscriptions And Memberships

by Daniel Blynn , Eric Berman , Stephen Freeland , Emily Tifft , Surya
Kundu and Amanda C. Schwartz

On March 23, 2023, the Federal Trade Commission (FTC or the Commission)
issued an 83-page Notice of Proposed Rulemaking (Notice) proposing
dramatic changes to current cancellation requirements for companies
selling products or services under a "negative option feature," i.e., a subscription, membership, a free or partially free trial that converts
to a paid subscription, or other recurring-payment program that
indefinitely renews unless a consumer affirmatively cancels or returns
the goods or services.1

The Commission's proposed Rule would: (i) expand the types of negative
option transactions covered by the Rule; (ii) increase the disclosure,
consent, notification, and cancellation requirements for businesses; and
(iii) expose sellers offering a negative option feature to potentially
stiff financial penalties for alleged misrepresentations – even when
those misrepresentations are unrelated to the negative option feature
itself. These changes—and the open questions left were they to go into effect—are examined in more detail here.

https://www.mondaq.com/article/news/1313174?q=1803232&n=785&tp=3&tlk=13&lk=35


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