The Federal Trade Commission’s (FTC) Notice of Proposed Rulemaking, Negative Option Rule (“Rule”), which proposes to substantially amend the existing Negative Option Rule and set higher standards for autorenewal promotions and sales than under existing federal or state laws and regulations, was published in the Federal Register on April 21, 2023, setting the clock ticking
Last week, the Federal Trade Commission (FTC) released its Notice of Proposed Rulemaking, Negative Option Rule (“Rule”), which proposes to substantially amend the existing Negative Option Rule and set higher standards for autorenewal promotions and sales than under existing federal or state laws and regulations. If promulgated, the revised Rule will apply to many more businesses and scenarios than are currently subject to autorenewal regulation. Once the proposed Rule is published in the Federal Register, which will be shortly, interested parties have 60 days after the date of publication to comment on the proposed Rule, which covers all forms of so-called “negative option” marketing and sales in all media, including negative options sold in a business-to-business (B2B) context (think about autorenewal terms in business services contracts), for month-to-month auto-renewing terms (think about “no contract” cell, Internet, media or entertainment services, and even auto-renewing monthly residential and commercial real estate tenancies) and for both the sale of goods and services. Other notable additions include enhanced disclosure, consent, and cancellation requirements, as well as a powerful misrepresentation prohibition and annual reminders.
Continue Reading UNSUBSCRIBED! — FTC Proposes Substantial Amendments to the Negative Option Rule to Cover all Autorenewals, including B2B Services, and Add New Disclosure, Consent, and Cancellation Requirements
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Legislatures, regulators, and enforcement agencies across the United States and in Germany have turned up the heat on subscription plans within the past year by updating their automatic renewal law (ARL). California and Germany have new ARL requirements starting July 1, 2022. Generally, an automatic renewal or negative option is a paid subscription plan that…