Overview
When testifying before Congress in May 2025, Federal Trade Commission (FTC) Chairman Andrew Ferguson observed that the FTC protects consumers most "when we take bad actors to court and win judgments, more than spending several years writing a rule, preparing it for release, and then defending that rule in court." Therefore, after the Eighth Circuit wiped out the FTC's "Click‑to‑Cancel" Rule last year in Custom Communications, Inc. v. FTC, 142 F.4th 1060 (8th Cir. 2025), which we previously covered, we did not expect the Commission to engage in further rulemaking activity with respect to its 1973 "Rule Concerning the Use of Prenotification Negative Option Plans" (commonly known as the "Negative Option Rule"). The Negative Option Rule applies to product-of-the-month plans in which sellers ship items automatically to their subscribers and bill them for the merchandise if the subscribers do not expressly reject the merchandise within a prescribed time. The vacated "Click-to-Cancel" Rule was an attempt by the prior FTC administration to expand the Negative Option Rule to all forms of negative option marketing, such as free-to-pay conversions and automatic renewal plans, and to dramatically enlarge the FTC's civil penalty authority to include misrepresentations completely unrelated to the negative option transaction itself.
As it turns out, the FTC has an appetite for rulemaking after all. It has issued two Advance Notices of Proposed Rulemaking (ANOPR) in as many days – one of which seeks public comment on a proposed rule regarding unfair or deceptive rental housing fee practices. The other one, relevant to this alert, asks the public how (and whether) to rebuild a trade regulation rule that targets negative options as a deceptive or unfair marketing practice. Announced on March 11, 2026, the ANOPR was published in the Federal Register on March 13, 2026. Public comments must be received on or before April 13, 2026.
The ANOPR asks for input on whether to amend the existing Negative Option Rule and what alternatives the FTC should consider in order to address purported long-standing and recurring problems, such as misleading or inadequate disclosures, charges without express consumer consent, and difficult cancellation processes. The FTC notes it has received more than 100,000 complaints about negative option practices over the past five years—evidence, in the Commission's view, that the problem persists, and that some sort of change is needed.
The Commission invites data on (1) how negative option programs operate across markets, (2) which practices most often mislead or trap consumers into enrollments without consent, (3) ideas regarding practical regulatory approaches (including adopting pieces of the vacated 2024 Rule, retaining the current Rule as‑is, or pursuing non‑regulatory tools like consumer guidance and education), and (4) relevant studies, data, or empirical evidence. Its request for market studies, economic data, and other empirical evidence indicates that the FTC wants to build a robust administrative record during the rulemaking process to better withstand any legal challenges that might ensue if and when a final revised rule is issued.
If you operate or market subscription programs, you should strongly consider submitting comments to the FTC. Businesses can use this 30-day comment period to educate FTC staff on important issues, including the prevalence of certain negative option marketing practices, the regulatory and compliance burdens of being subject to a patchwork of state laws, the use of "save" attempts after a subscriber indicates a desire to cancel, and whether certain types of transactions such as business-to-business agreements should be governed by such a rule. If you have questions about this ANOPR, submitting comments, or subscription practices generally, we can assist.
