FTC Defers Negative Option Rule Compliance Deadline by 60 Days
The Federal Trade Commission (FTC or Commission) on May 9, 2025, voted to defer the compliance deadline for the amended Negative Option Rule (Rule) by 60 days "given the complexities" of conforming to the amended Rule. Businesses now have until July 14, 2025, to come into compliance with the Rule's requirements, including providing additional disclosures, consents and simple cancellation protocols for all sales (including business-to-business) with a negative option feature, such as auto-renewing subscriptions and sales. Though uncertainty abounded about whether the FTC would enforce the Rule – with its newly appointed Commissioners who previously dissented during rulemaking and the dismissal of two Democratic Commissioners – all signs point to active enforcement once the Rule goes into effect on July 14.
Businesses should not sit idly by but instead ensure compliance with the Rule requirements given the Commission's statement that "regulated entities must be in compliance with the whole of the Rule because the Commission will begin enforcing it." The FTC also noted that "if enforcement experience exposes problems with the Rule, the Commission is open to amending the Rule to address any such problems." Businesses should expect active enforcement on and after July 14, following on the heels of the FTC's recent action against Uber, as Holland & Knight previously reported.
How Holland & Knight Can Help
If your company offers auto-renewing subscriptions and sales, Holland & Knight's Consumer Protection Defense and Compliance Team can help you understand the impact of the new Rule on your business and what changes your brand may need to make in order to come into compliance. The Holland & Knight team includes a robust FTC practice with experienced attorneys who are recognized thought leaders in consumer protection and competition issues, including issues related to negative option marketing. The team has represented clients in investigations involving allegations of violations of the Restore Online Shoppers' Confidence Act (ROSCA), as well as deceptive and unfair practices related to negative option marketing and sales.
Additionally, Holland & Knight is hosting a webinar, "Click-to-Cancel: What the New FTC Rule Means for Your Business and Subscriptions," on May 14, 2025, at 1 p.m. ET. View registration information.
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