Proposed Rule2026-04952
Rule Concerning the Use of Prenotification Negative Option Plans
Primary source
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Published
March 13, 2026
Issuing agencies
Federal Trade Commission
Abstract
The Federal Trade Commission ("FTC" or "Commission") seeks public comment on the need for amendments to the Commission's "Rule Concerning the Use of Prenotification Negative Option Plans" (i.e., "Negative Option Rule" or "Rule") to help consumers avoid recurring payments for products and services they did not intend to order and to allow them to cancel such payments without unwarranted obstacles.
Full Text
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<title>Federal Register, Volume 91 Issue 49 (Friday, March 13, 2026)</title>
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[Federal Register Volume 91, Number 49 (Friday, March 13, 2026)]
[Proposed Rules]
[Pages 12318-12325]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-04952]
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FEDERAL TRADE COMMISSION
16 CFR Part 425
RIN 3084-AB54
Rule Concerning the Use of Prenotification Negative Option Plans
AGENCY: Federal Trade Commission.
ACTION: Advance notice of proposed rulemaking; request for public
comment.
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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') seeks
public comment on the need for amendments to the Commission's ``Rule
Concerning the Use of Prenotification Negative Option Plans'' (i.e.,
``Negative Option Rule'' or ``Rule'') to help consumers avoid recurring
payments for products and services they did not intend to order and to
allow them to cancel such payments without unwarranted obstacles.
DATES: Comments must be received on or before April 13, 2026.
ADDRESSES: Interested parties may file a comment online or on paper, by
following the instructions in the Request for Comments part of the
SUPPLEMENTARY INFORMATION section below. We strongly encourage you to
submit your comments online through the <a href="https://www.regulations.gov">https://www.regulations.gov</a>
website. If you prefer to file your comments on paper, write ``Negative
Option Rule ANPRM, Project No. P064202'' on your comment and on the
envelope, and mail your comment by overnight service to: Federal Trade
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Mail
Stop H-144 (Annex N), Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Hong Park (202-326-2158), Attorney,
Division of Enforcement, Bureau of Consumer Protection, Federal Trade
Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.
SUPPLEMENTARY INFORMATION:
I. Overview
The Commission seeks comments on ways to improve its existing
regulations for negative option marketing, a common form of marketing
where the absence of affirmative consumer action constitutes assent to
be charged for goods or services. Negative option offers, which have
become more widespread in recent years, can provide substantial
benefits for sellers and consumers in the marketplace. However,
consumers cannot reap such benefits when sellers fail to make adequate
disclosures, charge consumers without their consent, or make
cancellation difficult or impossible. Over the years, these types of
negative option practices have remained a persistent source of consumer
harm, often saddling consumers with recurring payments for goods and
services they did not intend to purchase or they no longer want. In the
past, the Commission has sought to address such practices through
individual law enforcement cases and a patchwork of regulations.
Nevertheless, consumers continue to encounter these practices in the
marketplace and submit thousands of complaints about them to the FTC
each year.
In October 2024, the FTC amended the Rule to address ongoing
consumer complaints and continued misconduct in the marketplace. On
July 8, 2025, shortly before businesses would need to comply with all
parts of the Rule, the United States Court of Appeals for the Eighth
Circuit vacated the amended Rule, holding that the Commission had
failed to conduct the preliminary regulatory analysis required under
section 22 of the FTC Act, 15 U.S.C. 57b-3(b)(1).\1\ However, the
record compiled during that rulemaking, as well as ongoing consumer
complaints and recent enforcement cases,\2\ show continued unlawful
negative option marketing practices in the marketplace.
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\1\ Custom Commc'ns, Inc. v. FTC, 142 F.4th 1060, 1070-75 (8th
Cir. 2025).
\2\ Since the 2019 advance notice of proposed rulemaking
(``ANPRM''), 84 FR 52393 (Oct. 2, 2019), the FTC has brought cases
(using its own litigating authority or upon notification and
referral to the Department of Justice) alleging widespread negative
option abuses by major companies including Vonage, Amazon, Adobe,
Uber, LA Fitness, and Instacart. FTC v. Vonage Holdings, No. 3:22-
cv-6435 (D.N.J. Nov. 3, 2022); FTC v. <a href="http://Amazon.com">Amazon.com</a> Inc., No. 2:23-cv-
0932 (W.D. Wash. June 21, 2023); United States v. Adobe, Inc., No.
5:24-cv-03630 (N.D. Cal. July 23, 2024); FTC v. Uber Techs., Inc.,
No. 3:25-cv-03477 (N.D. Cal. Apr. 21, 2025); FTC v. Fitness Int'l,
LLC, No. 8:25-cv-01841 (C.D. Cal. Aug. 20, 2025); FTC v. Maplebear
Inc., No. 3:25-cv-10783 (N.D. Cal. Dec. 18, 2025) (Instacart).
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To address these persistent concerns, the Commission seeks comments
on ways to improve existing regulatory requirements, including whether
it should use its rulemaking authority under the FTC Act to modernize
the Rule.\3\
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\3\ Section 18 of the FTC Act authorizes the Commission to
promulgate rules specifying acts or practices in or affecting
commerce which are unfair or deceptive. 15 U.S.C. 57a(a)(1)(B).
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II. Negative Option Marketing
A ``negative option'' is any type of sales term or condition that
allows a seller to interpret a customer's silence, or failure to take
an affirmative action, as acceptance of an offer.\4\ Negative option
marketing generally falls into four categories: Prenotification
negative option plans, continuity plans, automatic renewals, and free-
to-pay or nominal-fee-to-pay conversion offers.
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\4\ The Commission's Telemarketing Sales Rule defines a negative
option feature as a provision in an offer or agreement to sell or
provide any goods or services ``under which the customer's silence
or failure to take an affirmative action to reject goods or services
or to cancel the agreement is interpreted by the seller as
acceptance of the offer.'' 16 CFR 310.2(w).
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Prenotification plans are the only negative option practice
currently covered by the Commission's Negative Option Rule. Under such
plans (e.g., product-of-the-month clubs), sellers send periodic notices
offering goods to participating consumers and then send--and charge
for--those goods only if the consumers take no action to decline the
offer. The periodic announcements and shipments can continue
indefinitely. In continuity plans, consumers agree in advance to
receive periodic shipments of goods or provision of services (e.g.,
bottled water delivery), which they continue to receive until they
cancel the agreement. In automatic renewals, sellers (e.g., a magazine
publisher) automatically renew consumers' subscriptions when they
expire and charge for them, unless consumers affirmatively cancel the
subscriptions. Finally, in free-to-pay or nominal-fee-to-pay plans,
consumers receive goods or services for free (or at a nominal fee) for
a trial period. After the trial period, sellers automatically begin
charging a fee (or higher fee) unless consumers affirmatively cancel or
return the goods or services.
Some negative option offers include upsell or bundled offers, where
the seller uses consumers' billing data to advertise and sell their
additional products or passes consumers' billing data to a third party
that generates additional offers. An upsell occurs
[[Page 12319]]
when a consumer completes a first transaction and then receives a
solicitation for an additional product or service. A bundled offer
occurs when a seller packages two products or services together,
typically so that they either cannot be purchased separately or can
only be purchased separately by paying a premium.
III. FTC's Negative Option Rule
The Commission first promulgated the Rule in 1973 pursuant to the
FTC Act, 15 U.S.C. 41 et seq., after finding that some negative option
marketers had committed unfair or deceptive marketing practices that
violated section 5 of the Act, 15 U.S.C. 45. As discussed above, the
Rule applies only to prenotification plans for the sale of goods and
does not reach most modern negative option marketing.\5\
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\5\ The Rule defines ``negative option plan'' narrowly to apply
only to prenotification plans. 16 CFR 425.1(c)(1). The Rule covers
prenotification plan marketing in all media. In 1998, the Commission
clarified that the Rule ``covers all promotional materials that
contain a means for consumers to subscribe to prenotification
negative option plans, including those that are disseminated through
newer technologies . . . .'' 63 FR 44555, 44561 (Aug. 20, 1998).
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The Rule requires prenotification plan sellers to clearly and
conspicuously disclose their plan's material terms before consumers
subscribe. It enumerates seven material terms sellers must disclose
clearly and conspicuously, including: (1) how subscribers must notify
the seller if they do not wish to purchase the selection; (2) any
minimum purchase obligations; (3) the subscribers' right to cancel; (4)
whether billing charges include postage and handling; (5) that
subscribers have at least ten days to reject a selection; (6) that if
any subscriber is not given ten days to reject a selection, the seller
will credit the return of the selection and the postage to return the
selection, along with shipping and handling; and (7) the frequency with
which announcements and forms will be sent.\6\ In addition, sellers
must follow certain procedures, including: abiding by particular time
periods during which sellers must send introductory merchandise and
announcements identifying merchandise the seller plans to send; giving
consumers a specified period to respond to announcements; providing
instructions for rejecting merchandise in announcements; and promptly
honoring written requests to cancel from consumers who have met any
minimum purchase requirements.\7\
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\6\ 16 CFR 425.1(a)(1)(i)-(vii).
\7\ 16 CFR 425.1(a)(2), (3), 425.1(b).
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IV. Existing Regulatory Requirements
In addition to the Rule, several other statutes and regulations
address aspects of harmful negative option practices. First, section 5
of the FTC Act, which prohibits unfair or deceptive acts or practices,
has traditionally served as one of the Commission's primary mechanisms
for addressing such practices. Additionally, the Restore Online
Shoppers' Confidence Act (``ROSCA'') (15 U.S.C. 8401-8405), the
Telemarketing Sales Rule (16 CFR part 310), the Postal Reorganization
Act (i.e., the Unordered Merchandise Statute) (39 U.S.C. 3009), and the
Electronic Fund Transfer Act (15 U.S.C. 1693-1693r) each address
various aspects of negative option marketing. ROSCA is the only Federal
law primarily designed to regulate negative option marketing, but it is
limited to seller transactions effected on the internet.\8\
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\8\ In addition to these Federal laws that are nationwide in
scope, an assortment of State laws also regulates negative option
marketing, primarily providing varying levels of protection for
consumers in those States. See, e.g., Cal. Bus. & Prof. Code sec.
17600 et seq. (California); Colo. Rev. Stat. sec. 6-1-732
(Colorado); Vt. Stat. Ann. Tit. 9, sec. 2454a (Vermont); Va. Code
Ann. sec. 59.1-207.46 (Virginia).
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A. Section 5 of the FTC Act
The main consumer protection statute enforced by the Commission is
section 5(a) of the FTC Act, 15 U.S.C. 45(a)(1). This provision states
that ``unfair or deceptive acts or practices in or affecting commerce .
. . are . . . declared unlawful.'' \9\ In past guidance and cases, the
FTC has highlighted five basic section 5 requirements that negative
option marketing must follow.\10\ First, marketers must disclose the
material terms of a negative option offer including, at a minimum, the
following key terms: the existence of the negative option offer; the
offer's total cost; the transfer of a consumer's billing information to
a third party, if applicable; and how to cancel the offer. Second,
disclosures must be clear and conspicuous. Third, sellers must disclose
the material terms of the negative option offer before consumers agree
to the purchase. Fourth, marketers must obtain consumers' consent to
such offers. Finally, marketers must not impede the effective operation
of promised cancellation procedures, and they should honor cancellation
requests that comply with such procedures.
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\9\ The FTC Act defines ``unfair or deceptive acts or
practices'' to include such acts or practices involving foreign
commerce that cause or are likely to cause reasonably foreseeable
injury within the United States or involve material conduct
occurring within the United States. 15 U.S.C. 45(a)(4)(A). It also
defines ``unfair'' practices as those that cause or are likely ``to
cause substantial injury to consumers which is not reasonably
avoidable by consumers themselves and not outweighed by
countervailing benefits to consumers or to competition.'' 15 U.S.C.
45(n).
\10\ See Negative Options: A Report by the staff of the FTC's
Division of Enforcement 26-29 (Jan. 2009), <a href="https://www.ftc.gov/sites/default/files/documents/reports/negative-options-federal-trade-commission-workshop-analyzing-negative-option-marketing-report-staff/p064202negativeoptionreport.pdf">https://www.ftc.gov/sites/default/files/documents/reports/negative-options-federal-trade-commission-workshop-analyzing-negative-option-marketing-report-staff/p064202negativeoptionreport.pdf</a>. In discussing the five
principal section 5 requirements related to negative options, the
report cites to the following pre-ROSCA cases and publications: FTC
v. JAB Ventures, No. CV08-04648 (C.D. Cal. 2008); FTC v. Complete
Weightloss Ctr., No. 1:08cv00053 (D.N.D. 2008); FTC v. Berkeley
Premium Nutraceuticals, No. 1:06cv00051 (S.D. Ohio 2006); FTC v.
Think All Publ'g, No. 4:07cv11 (E.D. Tex. 2006); FTC v. Hispanexo,
No. 1:06cv424 (E.D. Va. 2006); FTC v. <a href="http://Consumerinfo.com">Consumerinfo.com</a>, No. SACV05-
801 (C.D. Cal. 2005); FTC v. Conversion Mktg., No. SACV04-1264 (C.D.
Cal. 2004); FTC v. Mantra Films, No. CV03-9184 (C.D. Cal. 2003); FTC
v. Preferred Alliance, No. 103-CV0405 (N.D. Ga. 2003); United States
v. Prochnow, No. 102-CV-917 (N.D. Ga. 2002); FTC v. Ultralife
Fitness, Inc., No. 2:08-cv-07655-DSF-PJW (C.D. Cal. 2008); Am. Isuzu
Motors, FTC Docket No. C-3712 (1996); FTC v. Universal Premium
Servs., No. CV06-0849 (C.D. Cal. 2006); FTC v. Remote Response, No.
06-20168 (S.D. Fla. 2006); and the FTC Dot Com Disclosures (2000),
<a href="https://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-staff-issues-guidelines-internet-advertising/0005dotcomstaffreport.pdf">https://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-staff-issues-guidelines-internet-advertising/0005dotcomstaffreport.pdf</a>.
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Although adherence to these five principles should minimize the
likelihood of non-compliance with section 5, the legality of a
particular negative option depends on an individualized assessment of,
among other things, the claims made in the advertisement, consumers'
understanding of the advertisement (e.g., net impression), and the
seller's business practices. In addition to these deception-related
requirements, several courts have held that billing consumers without
consumers' express informed consent constitutes an unfair act or
practice under the FTC Act.\11\
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\11\ Courts have found unauthorized billing to be unfair under
the FTC Act. See, e.g., FTC. v. Neovi, Inc., 604 F.3d 1150, 1157-59
(9th Cir. 2010), amended by 2010 WL 2365956 (9th Cir. June 15,
2010); FTC v. <a href="http://Amazon.com">Amazon.com</a>, Inc., No. C14-1038-JCC, 2016 WL 10654030,
at *8 (W.D. Wash. July 22, 2016); FTC v. Ideal Fin. Sols., Inc., No.
2:13-CV-00143-JAD, 2015 WL 4032103, at *8 (D. Nev. June 30, 2015).
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B. ROSCA
Enacted by Congress in 2010 to address ongoing problems with online
negative option marketing, ROSCA contains general provisions related to
disclosures, consent, and cancellation.\12\ ROSCA prohibits charging or
attempting to charge consumers for goods or services sold on the
internet through any negative option feature unless the marketer: (1)
clearly and conspicuously discloses all material terms of the
transaction before obtaining the consumer's billing information; (2)
[[Page 12320]]
obtains a consumer's express informed consent before charging the
consumer's account; and (3) provides simple mechanisms for the consumer
to stop recurring charges.\13\
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\12\ 15 U.S.C. 8401-8405.
\13\ 15 U.S.C. 8403. ROSCA incorporates the definition of
``negative option feature'' from the Commission's Telemarketing
Sales Rule, 16 CFR 310.2(w).
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ROSCA also addresses offers made by, or on behalf of, third-party
sellers during, or immediately following, a transaction effected on the
internet with an initial merchant.\14\ In connection with these offers,
ROSCA prohibits post-transaction third-party sellers from charging or
attempting to charge consumers for any good or service unless the
seller: (1) before obtaining the consumer's billing information,
clearly and conspicuously discloses all material terms of the
transaction; and (2) receives the consumer's express informed consent
for the charge by obtaining the consumer's name, address, contact
information, as well as the full account number to be charged, and by
requiring the consumer to perform an additional affirmative action
indicating consent.\15\ ROSCA also prohibits initial merchants from
disclosing billing information to any post-transaction third-party
seller for use in any internet-based sale of goods or services.\16\
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\14\ ROSCA defines ``post-transaction third-party seller'' as a
person other than the initial merchant who sells any good or service
on the internet and solicits the purchase on the internet through an
initial merchant after the consumer has initiated a transaction with
the initial merchant. 15 U.S.C. 8402(d)(2).
\15\ 15 U.S.C. 8402(a).
\16\ 15 U.S.C. 8402(b).
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ROSCA provides that a violation of that Act shall be treated as a
violation of a Commission rule under section 18 of the FTC Act.\17\
Thus, the Commission may seek a variety of remedies for violations of
ROSCA, including civil penalties under section 5(m)(1)(A) of the FTC
Act; \18\ injunctive relief under section 13(b) of the FTC Act; \19\
and consumer redress, damages, and other relief under section 19 of the
FTC Act.\20\ Although Congress charged the Commission with enforcing
ROSCA, it did not require the FTC to create regulations pursuant to its
section 18 rulemaking authority.\21\
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\17\ 15 U.S.C. 8404. Section 18 of the FTC Act is 15 U.S.C. 57a.
\18\ 15 U.S.C. 45(m)(1)(A).
\19\ 15 U.S.C. 53(b).
\20\ 15 U.S.C. 57b(a)(1), (b).
\21\ ROSCA states that a violation ``of this chapter or any
regulation prescribed under this chapter shall be treated as a
violation of a rule under section 18 of the Federal Trade Commission
Act (15 U.S.C. 57a) regarding unfair or deceptive acts or
practices.'' 15 U.S.C. 8404(a).
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C. Telemarketing Sales Rule
The Telemarketing Sales Rule (``TSR'') (16 CFR part 310) prohibits
deceptive telemarketing acts or practices, including those involving
negative option offers, and certain types of payment methods common in
deceptive marketing. The TSR applies only to negative option offers
made over the telephone. Specifically, the TSR requires that
telemarketers disclose all material terms and conditions of the
negative option feature, including the need for affirmative consumer
action to avoid the charges; the date (or dates) the charges will be
submitted for payment; and the specific steps the customer must take to
avoid the charges. It also prohibits telemarketers from misrepresenting
such information and contains specific requirements related to payment
authorization.\22\ The Commission amended the TSR in 2015 to prohibit
the use of payment methods often used in deceptive marketing, including
negative options, such as remotely created checks.\23\
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\22\ 16 CFR 310.3(a).
\23\ 80 FR 77520 (Dec. 14, 2015). The TSR Notice of Proposed
Rulemaking (78 FR 41200 (July 9, 2013)) noted negative option cases
where the defendants used unauthorized remotely created checks. See,
e.g., FTC v. FTN Promotions, Inc., No. 8:07-1279 (M.D. Fla. Dec. 30,
2008) (Stip. Perm. Inj.) (defendants allegedly caused more than $171
million in unauthorized charges to consumers' accounts for bogus
travel and buyers' clubs in part by using unauthorized remotely
created checks).
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D. Other Relevant Requirements
The Electronic Fund Transfer Act (``EFTA'') \24\ and the Postal
Reorganization Act (``PRA'') (i.e., Unordered Merchandise Statute) also
contain provisions that address negative option marketing.\25\ The EFTA
prohibits sellers from imposing recurring charges on a consumer's debit
cards or bank accounts without written authorization.\26\ The PRA
provides that mailing unordered merchandise, or a bill for such
merchandise, constitutes an unfair method of competition and an unfair
trade practice in violation of section 5 of the FTC Act.\27\
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\24\ 15 U.S.C. 1693-1693r.
\25\ 39 U.S.C. 3009.
\26\ The EFTA provides that the Commission shall enforce its
requirements, except to the extent that enforcement is specifically
committed to some other Federal government agency, and that a
violation of any of its requirements shall be deemed a violation of
the FTC Act. Accordingly, the Commission has authority to seek the
same injunctive and monetary equitable relief for EFTA violations
that it can seek for other section 5 violations.
\27\ The Commission has authority to seek the same remedies for
PRA violations that it can seek for other section 5 violations. For
example, the Commission can seek civil penalties pursuant to section
5(m)(1)(A) of the FTC Act from violators who have actual knowledge
that the Commission has found mailing unordered merchandise unfair.
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V. Limitations of Existing Regulatory Requirements
The existing patchwork of laws and regulations does not provide
industry and consumers with a consistent legal framework for negative
option marketing across different media and types of plans. For
instance, as discussed above, the current Rule does not cover common
practices such as continuity plans, automatic renewals, and trial
conversions.\28\ In addition, ROSCA and the TSR each address negative
option plans only in certain media--ROSCA's general statutory
prohibitions on deceptive negative option marketing apply only to
transactions effected on the internet, whereas the TSR's more specific
provisions only apply to telemarketing. Furthermore, harmful negative
option practices that fall outside of ROSCA and the TSR's coverage
still occur.\29\ Therefore, under the current framework, different
rules apply depending on whether a negative option offer is made
online, over the phone, or in some other medium (e.g., in print,
through the mail, etc.).
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\28\ Indeed, the prenotification plans covered by the Rule
represent only a small fraction of negative option marketing. In
2024, for instance, FTC staff estimated that only 25 sellers
(``clubs'') were subject to the current Rule's requirements. 88 FR
59922 (Aug. 30, 2023); 89 FR 377 (Jan. 3, 2024).
\29\ For instance, in 2018, the Commission brought two cases
under section 5 involving negative option plans that did not involve
either internet sales or telemarketing. See FTC v. Health Research
Labs., LLC, No. 2:17-cv-00467-JDL (D. Me. 2018); FTC v. Mktg.
Architects, No. 2:18-cv-00050 (D. Me. 2018).
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VI. Past FTC Rulemaking Efforts
The Commission began a regulatory review of the Rule in 2009 (74 FR
22720 (May 14, 2009)), following a 2007 FTC workshop and subsequent
Staff Report.\30\ The Commission completed the review in 2014 (79 FR
44271 (July 31, 2014)). The Commission received comments advocating for
the Rule's expansion because of the continued presence of ``unfair,
deceptive, and otherwise problematic negative option marketing
practices [that] continue to cause substantial consumer injury, despite
determined enforcement efforts by the Commission and other law
enforcement agencies.'' \31\ It also noted
[[Page 12321]]
that practices not covered by the Rule (e.g., trial conversions and
continuity plans) accounted for most of its enforcement activity in
this area. Despite these findings, the Commission declined to expand or
enhance the Rule at that time, concluding that amendments were not
warranted because the enforcement tools available then--namely, the TSR
and ROSCA--might prove adequate to address continued deceptive and
unfair negative option marketing. However, the Commission also
explained that, if ROSCA and its other enforcement tools do not
adequately protect consumers, the Commission could consider, based on a
more complete factual and evidentiary record, whether and how to amend
the Rule.\32\ The Commission's declination was made at a time,
moreover, when courts still interpreted the FTC Act's section 13(b)
authority as allowing monetary relief for harmed consumers.\33\
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\30\ See Negative Options: A Report by the staff of the FTC's
Division of Enforcement 26-29, <a href="https://www.ftc.gov/sites/default/files/documents/reports/negative-options-federal-trade-commission-workshop-analyzing-negative-option-marketing-report-staff/p064202negativeoptionreport.pdf">https://www.ftc.gov/sites/default/files/documents/reports/negative-options-federal-trade-commission-workshop-analyzing-negative-option-marketing-report-staff/p064202negativeoptionreport.pdf</a>.
\31\ The Commission cited a number of its law enforcement
actions challenging negative option marketing practices, including,
for example, FTC v. Process Am., Inc., No. 14-0386-PSG-VBKx (C.D.
Cal. Jan. 16, 2014) (processing of unauthorized charges relating to
negative option marketing); FTC v. Willms, No. 2:11-cv-00828 (W.D.
Wash. May 16, 2011) (internet free trials and continuity plans); FTC
v. Moneymaker, No. 2:11-cv-00461-JCM-RJJ (D. Nev. Mar. 28, 2011)
(internet trial offers and continuity programs); FTC v. Johnson, No.
2:10-cv-02203-RLH-GWF (D. Nev. Dec. 21, 2010) (internet trial
offers); and FTC v. John Beck Amazing Profits, LLC, No. 2:09-cv-
04719 (C.D. Cal. June 30, 2009) (infomercial and telemarketing trial
offers and continuity programs); see also ``An Overview of the FTC's
Enforcement Actions Concerning Negative Option Marketing,'' a
presentation delivered during the Commission's 2007 ``Negative
Options: An FTC Workshop Analyzing Negative Option Marketing,''
<a href="https://www.ftc.gov/news-events/events-calendar/2007/01/negative-options-workshop-analyzing-negative-option-marketing">https://www.ftc.gov/news-events/events-calendar/2007/01/negative-options-workshop-analyzing-negative-option-marketing</a>.
\32\ 79 FR at 44276.
\33\ Numerous courts had held that section 13(b)'s language
allowing the Commission to obtain a ``permanent injunction''
included the authority to seek equitable monetary relief such as
restitution or disgorgement. See, e.g., FTC v. Ross, 743 F.3d 886,
890-92 (4th Cir. 2014); FTC v. Bronson Partners, LLC, 654 F.3d 359,
367 & 375 (2d Cir. 2011); FTC v. Stefanchik, 559 F.3d 924, 931 (9th
Cir. 2009). The Supreme Court rejected this interpretation in 2021.
AMG Cap. Mgmt., LLC v. FTC, 593 U.S. 67 (2021).
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After the conclusion of the 2009 regulatory review of the Rule,
mounting evidence strongly suggested that unlawful negative option
marketing continued to harm consumers. The Commission and the States
continued to regularly bring cases challenging unlawful negative option
practices, including more than 20 FTC cases before 2019. These matters
involved a range of deceptive or unfair practices, including inadequate
disclosures for ``free'' offers and other products or programs,
enrollment without consumer consent, and inadequate or overly
burdensome cancellation and refund procedures.\34\
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\34\ Examples of these matters include: FTC v. Nutraclick LLC,
No. 2:16-cv-06819-DMG (C.D. Cal. 2016); FTC v. Health Formulas, LLC,
No. 2:14-cv-01649-RFB-GWF (D. Nev. 2016); FTC v. AAFE Products
Corp., No. 3:17-cv-00575 (S.D. Cal. 2017); FTC v. Pact Inc., No.
2:17-cv-1429 (W.D. Wash. 2017); FTC v. Tarr, No. 3:17-cv-02024-LAB-
KSC (S.D. Cal. 2017); FTC v. AdoreMe, Inc., No. 1:17-cv-09083
(S.D.N.Y 2017); FTC v. Credit Bureau Ctr., LLC, No. 17-cv-00194
(N.D. Ill. 2017); FTC v. JDI Dating, Ltd., No. 1:14-cv-08400 (N.D.
Ill. 2014); FTC v. XXL Impressions, No. 1:17-cv-00067-NT (D. Me.
2017); FTC v. <a href="http://DOTAuthority.com">DOTAuthority.com</a>, Inc., No. 0:16-cv-62186-WJZ (S.D.
Fla. 2018); FTC v. Bunzai Media Grp., Inc., No. CV15-04527-GW(PLAx)
(C.D. Cal. 2015); FTC v. RevMountain, LLC, No. 2:17-cv-02000-APG-GWF
(D. Nev. 2018); FTC v. Apex Capital Grp., LLC, No. 2:18-cv-9573
(C.D. Cal. 2018); FTC v. Jason Cardiff, No. 18-cv-2104 (C.D. Cal.
2018); FTC v. Triangle Media Corp., No. 18-cv-1388 (S.D. Cal. 2018);
FTC v. AH Media Grp., LLC, No. 3:19-cv-4022 (N.D. Cal. 2019); FTC v.
Elite IT Partners, Inc., No. 2:19-cv-125 (D. Utah 2019); FTC v. F9
Advertising LLC, No. 3:19-cv-1174 (D. P.R. 2019); UrthBox, Inc., FTC
Matter No. C-4676 (2019).
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In 2019, the Commission published an advance notice of proposed
rulemaking (``ANPRM'') seeking comment on the Rule (84 FR 52393 (Oct.
2, 2019)). Specifically, the Commission sought comment on alternatives,
including amendments to further address disclosures, consumer consent,
and cancellation. The Commission also requested input on using its
authority under section 18 of the FTC Act to expand the Rule. In 2021,
the Commission issued an ``Enforcement Policy Statement Regarding
Negative Option Marketing.'' \35\
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\35\ Enforcement Policy Statement, 86 FR 60822 (Nov. 4, 2021).
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In 2023, the Commission issued a notice of proposed rulemaking
(``NPRM'') to amend the Rule.\36\ The Commission received over 16,000
comments in response.\37\
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\36\ 88 FR 24716 (Apr. 24, 2023).
\37\ See 89 FR 90476 (Nov. 15, 2024). Unique public comments to
the NPRM are available online. See <a href="http://regulations.gov">regulations.gov</a>, Negative Option
Rule (NPRM), FTC-2023-0033-0001, <a href="https://www.regulations.gov/document/FTC-2023-0033-0001">https://www.regulations.gov/document/FTC-2023-0033-0001</a>.
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In 2024, the Commission promulgated an amended Rule.\38\ The
amendments expanded the scope of the Rule to cover all negative option
programs--across all media--and made it an unfair or deceptive act or
practice under section 5 of the FTC Act:
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\38\ 89 FR 90476 (Nov. 15, 2024).
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<bullet> to misrepresent any material fact made while marketing
using a negative option feature (Sec. 425.3);
<bullet> to fail to clearly and conspicuously disclose material
terms prior to obtaining a consumer's billing information in connection
with a negative option feature (Sec. 425.4);
<bullet> to fail to obtain a consumer's express informed consent to
the negative option feature before charging the consumer (Sec. 425.5);
and
<bullet> to fail to provide a simple mechanism to cancel the
negative option feature and immediately halt charges (Sec. 425.6).
The amended Rule had an effective date of January 14, 2025 and a
deferred compliance date of May 14, 2025 for certain parts (later
extended to July 14, 2025).\39\
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\39\ FTC, Statement of the Commission Regarding the Negative
Option Rule, Matter No. P064202 (May 9, 2025).
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In July 2025, the Eighth Circuit vacated the amended Rule
(``Vacated Rule'').\40\ The court found the FTC should have conducted a
preliminary regulatory analysis under section 22 of the FTC Act, 15
U.S.C. 57b-3(b)(1).\41\
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\40\ Custom Commc'ns, Inc. v. FTC, 142 F.4th 1060, 1070-75 (8th
Cir. 2025). The Eighth Circuit's vacatur reinstated the prior
version of the Rule which was first promulgated in 1973. 38 FR 4896
(Feb. 22, 1973).
\41\ Custom Commc'ns, Inc., 142 F.4th at 1074-75.
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VII. Ongoing Problems With Negative Option Marketing
The Commission continues to receive thousands of complaints each
year regarding negative option marketing. The rate of these complaints
has steadily risen from at least 33 per day in late 2020 to more than
90 per day in 2025. The complaints come from all 50 States, and involve
dozens of industries, and hundreds of companies. These complaints have
led the Commission to bring additional enforcement actions. For
instance, since January 2025, the Commission has initiated five cases
alleging negative option misconduct, and has approved six settlements
of alleged negative option misconduct.\42\
[[Page 12322]]
These recent cases and the increasingly high volume of complaints
suggest there is prevalent, unabated consumer harm in the marketplace.
As discussed below, the Commission seeks comments on these issues.
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\42\ The Commission initiated (or referred to the Department of
Justice for initiating) enforcement actions in FTC v. JustAnswer
LLC, No. 3:26-cv-00333 (N.D. Cal. Jan. 13, 2026); United States v.
Iconic Hearts Holdings, No. 2:25-cv-09310 (C.D. Cal. Sept. 29,
2025); FTC v. Int'l Markets Live, Inc., No. 2:25-cv-00760 (D. Nev.
May 20, 2025); FTC v. Fitness Int'l, LLC, No. 8:25-cv-1841 (C.D.
Cal. Aug. 20, 2025); and FTC v. Uber Tech., Inc., No. 3:25-cv-03477
(N.D. Cal. Apr. 21, 2025). The Commission approved settlements in
FTC v. Maplebear Inc., No. 3:25-cv-10783 (N.D. Cal. Dec. 18, 2025)
(Instacart; Proposed Stipulated Order); FTC v. <a href="http://Amazon.com">Amazon.com</a> Inc., No.
2:23-cv-0932 (W.D. Wash. Sept. 25, 2025) (Stipulated Order); FTC v.
Chegg, Inc., No. 5:25-cv-07827 (N.D. Cal. Sept. 15, 2025)
(Stipulated Order); FTC v. Match Grp., Inc., No. 3:19-cv-0228 1-K
(N.D. Tex. Aug. 12, 2025) (Proposed Stipulated Order); FTC v.
<a href="http://Paddle.com">Paddle.com</a> Market Ltd., No. 1:25-cv-01886 (D.D.C. June 16, 2025)
(Stipulated Order); FTC v. Cleo AI, Inc., No. 1:25-cv-02594
(S.D.N.Y. Mar. 27, 2025) (Stipulated Order); see also FTC v.
<a href="http://Amazon.com">Amazon.com</a>, Inc., 2025 WL 2677086 (W.D. Wash. Sept. 17, 2025)
(granting summary judgment on certain ROSCA violations and
individual liability). In addition, the Commission has brought a
number of other recent enforcement actions involving unfair or
deceptive negative option practices, using its own litigating
authority or upon notification and referral to the Department of
Justice. See, e.g., United States v. Adobe, Inc., No. 5:24-cv-03630
(N.D. Cal. July 23, 2024); FTC v. Wealthpress Holdings, Inc., No.
3:23-cv-00046 (M.D. Fla. Jan. 12, 2023); FTC v. Vonage Holdings, No.
3:22-cv-6435 (D.N.J. Nov. 3, 2022); FTC v. Benefytt Techs., Inc.,
8:22-cv-1794 (M.D. Fla. Aug. 8, 2022); FTC v. First Am. Payment
Sys., No. 4:22-cv-654 (E.D. Tex. July 29, 2022); Movie Pass, No. C-
4751 (FTC Oct. 5, 2021); FTC v. <a href="http://RagingBull.com">RagingBull.com</a>, LLC, No. 1:20-cv-
3538 (D. Md. Dec. 14, 2020); FTC v. Age of Learning, Inc., No. 2:20-
cv-07996 (C.D. Cal. Sept. 2, 2020); United States v <a href="http://MyLife.com">MyLife.com</a>,
Inc., No. 20-cv-6692 (C.D. Cal. July 27, 2020).
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VIII. Objectives, Regulatory Alternatives, and Request for Comments
The Commission seeks comments on the current Rule as well as
regulatory alternatives to better address unfair or deceptive negative
option practices. The Commission promulgated the current Rule to
address unlawful negative option conduct in the marketplace as it
existed over 50 years ago.\43\ While the record in the prior proceeding
amply demonstrates the prevalence of unlawful negative option
conduct,\44\ the Commission solicits additional public comment to
update the record and ensure its rulemaking adequately responds to
concerns from both consumers and industry.
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\43\ See 38 FR 4896 (Feb. 22, 1973); 63 FR 44555 (Aug. 20, 1998)
(minor technical amendments).
\44\ For instance, consumer complaints, law enforcement actions,
and academic studies, among other evidence, show unfair and
deceptive negative option practices permeate the economy across
industries. See supra Section VII (consumer complaints about
negative option marketing have increased to 90 per day in 2025);
supra notes 2, 34 (collecting recent cases); see also 89 FR 90476
(Nov. 11, 2024) at Sections VII.A.1(a)-(b), II.A.1(b) (2024
Statement of Basis and Purpose sections collecting enforcement
actions, studies, and consumer complaints that demonstrate the
prevalence of negative option misconduct for the Vacated Rule).
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Specifically, the Commission seeks information relating to
practices that prevent consumers from understanding the terms of the
negative option program, enroll consumers without their express
informed consent, or impede consumers from canceling their enrollments.
The Commission also seeks information regarding ways to address these
practices, including retaining the current Rule, adopting provisions of
the Vacated Rule or some other provision, or implementing alternatives
to regulation such as educating consumers and businesses on avoiding
unlawful negative option practices.
In responding to the questions below, the Commission invites the
public to submit any market studies, economic data, or other empirical
evidence that the Commission may not have considered in promulgating
the Vacated Rule in the prior proceeding. The Commission reminds
commenters that, while it reviews all submissions, comments may be more
persuasive when substantiated with evidence, particularly economic
evidence.
A. General Questions About the Current Rule
1. Is there a continuing need for the current Rule? Why or why not?
2. Is there a need for new provisions to prevent unfair or
deceptive practices by addressing negative option plans not covered by
the current Rule? Why or why not?
a. If new regulations are needed, should the Rule be amended, or
should a new Rule or Rules be created?
b. Should the Commission consider alternatives to new regulation,
such as the publication of additional consumer and business education?
If so, what are these alternatives, and how effectively would they
prevent unfair or deceptive negative option practices?
c. What are the benefits and costs to consumers and businesses
under your proposed approach compared to the other options, whether
issuing a new Rule(s), amending the existing Rule, or implementing an
alternative to new regulation?
d. What evidence supports your responses to the above questions?
B. Questions About the Marketplace for Negative Option Programs
1. How many negative option enrollments do all negative option
sellers have collectively?
a. On average, how many negative option programs is each person,
household, or business enrolled in?
b. On average, how many negative option program enrollments occur
each year, by enrollment method (i.e., online, over the phone, in
person)?
c. On average, how many negative option program enrollments are
cancelled each year, by cancellation method (i.e., online, over the
phone, in person)?
d. On average, how often do consumers attempt to cancel a negative
option program without being able to complete the cancellation process?
2. Which industries \45\ sell negative option programs? How many
businesses sell negative option programs? Is this expected to change,
and if so, how?
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\45\ You may use NAICS codes to identify industries. See NAICS
Code Identification Tools, <a href="https://www.naics.com/search/">https://www.naics.com/search/</a>.
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a. What is the total revenue associated with negative option
programs?
b. What is the average price of a negative option program?
c. How much do consumers spend on negative option programs that go
unused?
d. How much do consumers spend on negative option programs after
attempting to cancel?
3. On average, how long does it take consumers to enroll in
negative option programs, by enrollment method (i.e., online, over the
phone, in person), starting from the time the consumer reaches the
website, calls the phone number, or visits the premises designated by
the business for enrolling, and including the time consumers spend to
navigate the website, wait for a representative, or take steps to reach
a representative?
a. For each enrollment method, please provide the average times for
all consumers and separately the time for consumers at the 25th
percentile, 50th percentile, and 75th percentile ranked by time taken
to enroll.
b. Do these enrollment times vary by industry? If so, how?
4. On average, how long does it take consumers to cancel negative
option enrollments, by cancellation method (i.e., online, over the
phone, in person), starting from the time the consumer reaches the
website, calls the phone number, or visits the premises designated by
the business for canceling, and including the time consumers spend to
navigate the website, wait for a representative, or take steps to reach
a representative?
a. For each cancellation method, please provide the average times
for all consumers and separately the time for consumers at the 25th
percentile, 50th percentile, and 75th percentile ranked by time taken
to cancel.
b. Do these cancellation times vary by industry? If so, how?
5. Are third parties, such as payment service providers,
subscription management providers, or customer relationship management
providers, involved in enrolling consumers into, or canceling
consumers' enrollment for, a business's negative option program?
a. If so, what types of third parties, and how are they involved?
b. What impact, if any, do these third parties have on a business's
ability to disclose the material terms of the program, obtain
consumers' express informed consent, or enable consumers to easily
cancel their enrollment?
c. What role, if any, do third-party service providers, such as
subscription management providers or customer relationship management
providers, currently have in ensuring compliance with existing State
and Federal laws governing negative options?
[[Page 12323]]
6. What evidence supports your responses to the above questions?
7. What timeframe(s) do your responses to the above questions
cover?
C. Questions About Unfair or Deceptive Practices Involving Negative
Option Programs
1. What unfair or deceptive practices do consumers encounter that
involve negative option programs?
a. What practices make it difficult for consumers to understand
that a product or service is part of a negative option program?
b. What practices make it difficult for consumers to understand all
material terms of a negative option program?
c. What practices enroll consumers into negative option programs
without their express informed consent?
d. What practices make it difficult for consumers to cancel the
negative option feature of a product or service offering?
e. Is it unfair or deceptive to offer discounts or other incentives
to remain enrolled in a negative option program (``Saves'') instead of
promptly honoring a consumer's request to cancel? Why or why not?
i. What proportion of consumers who are offered Saves accept them?
ii. On average, how much money do consumers save by accepting a
Saves offer?
iii. To what extent, if any, do Saves make it difficult for
consumers to cancel their enrollment in a negative option program? If
the business makes a Saves offer and the consumer declines it, how much
longer on average does it take for a consumer to cancel?
iv. How do Saves impact competition in the negative options
marketplace? What are the circumstances under which Saves foster
competition and result in lower prices and/or better negative option
programs for consumers? What are the circumstances under which Saves
impede competition by undermining consumers' ability to cancel and
choose a different product or service?
v. What has been the impact of State laws regulating Save attempts
(e.g., California) on offers to consumers? Has compliance with these
laws resulted in an increase or decrease in Saves offered to consumers?
vi. In addition to the above factors, what other factors should the
Commission consider in evaluating the extent to which Saves are unfair
or deceptive? What do these factors indicate about whether Saves are
unfair or deceptive?
2. Congress authorized the Commission to propose a rule defining
unfair or deceptive acts or practices with specificity when the
Commission ``has reason to believe that the unfair or deceptive acts or
practices which are the subject of the proposed rulemaking are
prevalent.'' \46\ A determination about prevalence can be made either
on the basis of previous Commission cease-and-desist orders regarding
such acts or practices, or when the Commission has ``any other
information'' that ``indicates a widespread pattern of unfair or
deceptive acts or practices.'' \47\ Which unfair or deceptive negative
option practices identified in your response to Question C.1 are
prevalent? For each of these practices, please answer the following:
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\46\ 15 U.S.C. 57a(b)(3).
\47\ Id.
---------------------------------------------------------------------------
a. Is there information indicating that such practices are
prevalent? If so, what information?
b. How frequently do consumers encounter the practice?
c. What proportion of consumers have encountered the practice?
d. Is the practice prevalent for all types of negative option
programs or just certain types?
e. If just certain types, for which types of negative option
programs is the practice not prevalent?
f. Are there features of certain negative option programs that
prevent the practice from becoming prevalent?
i. If so, which features?
ii. Is the practice not prevalent for negative option transactions
between certain types of parties (e.g., B2B transactions between
sophisticated business entities)? If so, which types of parties?
iii. How do negative option transactions between these types of
parties prevent the practice from becoming prevalent?
g. Is the practice not prevalent for certain industries?
i. If so, which industries?
ii. What aspects of these industries prevent the practice from
becoming prevalent?
h. Do you expect future developments in the negative option
marketplace to change any of your responses to the above questions? If
so, how?
3. How many, or what proportion of, businesses that sell negative
option programs do not engage in any unfair or deceptive negative
option practices?
a. Does the proportion that is not engaged in any unfair or
deceptive negative option practices vary by observable characteristics,
such as industry or firm size? If so, how?
b. Is the proportion of businesses not engaged in unfair or
deceptive negative option practices changing over time (i.e., getting
larger or smaller)? If so, how?
4. To the extent unfair or deceptive negative option practices are
prevalent in any industry, how do the practices affect competition
among businesses?
a. How do the practices affect a business's ability to win and
retain customers?
b. How do the practices affect the need for businesses to compete
on the merits of their products or services?
c. Are businesses that do not engage in the practices at a
competitive disadvantage to those who do? If so, how?
d. Do the practices affect small businesses differently? If so,
how?
5. What evidence supports your responses to the above questions?
D. Questions About Specific Rule Provisions
The Commission may consider portions of the Vacated Rule to propose
a new rule.\48\ The Vacated Rule imposed the following four
requirements. First, it prohibited misrepresentations of any material
fact in connection with a negative option offering.\49\ Second, it
required sellers to obtain the consumer's consent to the negative
option feature separately from any other portion of the transaction and
to maintain records verifying the consumer's consent.\50\ Third, it
required disclosure of important information about the negative option
feature immediately next to the means for obtaining the consumer's
consent for the negative option.\51\ Finally, it required a simple
[[Page 12324]]
mechanism for consumers to cancel the negative option feature.\52\ In
the November 2024 Final Rule document, the Commission analyzed the
economic impact of these four requirements and the other requirements
of the Vacated Rule in its Final Regulatory Analysis, Final Regulatory
Flexibility Act Analysis, and Paperwork Reduction Act Analysis.\53\ The
following questions solicit comments on these four requirements and
their economic impact.
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\48\ Since January 2025, the FTC has received two petitions for
rulemaking regarding negative options. Petition for Rulemaking of
Consumer Federation of America and the American Economic Liberties
Project (Dec. 3, 2025), <a href="https://www.regulations.gov/document/FTC-2025-0792-0001">https://www.regulations.gov/document/FTC-2025-0792-0001</a>; Petition for Rulemaking of Central Office of Reform
and Efficiency (Negative Option Rule) (Jan. 21, 2025), <a href="https://www.regulations.gov/document/FTC-2025-0003-0001">https://www.regulations.gov/document/FTC-2025-0003-0001</a>. The Commission will
process these requests pursuant to 16 CFR 1.31.
\49\ Vacated Rule at Sec. 425.3. The prohibition applied to
misrepresentations relating to the negative option feature, the
underlying product or service, or ``[a]ny other Material fact.''
\50\ Vacated Rule at Sec. 425.5. The Vacated Rule required
Negative Option Sellers to maintain records verifying consumer
consent to the negative option feature for 3 years. The Vacated
Rule, however, deemed most sellers in compliance with this
recordkeeping requirement if they obtained consumer consent using
``a check box, signature, or other substantially similar method,''
which the consumer must complete to accept the negative option
feature.
\51\ Vacated Rule at Sec. 425.4. Specifically, the Vacated Rule
required disclosure that consumers will be charged unless the
consumer cancels; the deadline(s) by which the consumer must cancel
to avoid the charge(s); the amount of the charge(s); and the
information necessary for the consumer to find the simple
cancellation mechanism.
\52\ Vacated Rule at Sec. 425.6. The Vacated Rule required the
simple cancellation mechanism to be ``at least as easy to use'' as
the mechanism used to obtain the consumer's consent to the negative
option feature and specified certain minimum requirements.
\53\ 89 FR 90476, 90517-37 (Nov. 15, 2024) (Sections X, XI, and
XII).
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1. What requirements, if any, from the Vacated Rule are needed to
address unlawful negative option practices prevalent in the
marketplace? For any such requirement, or part thereof, please provide
the following information:
a. What benefit would the requirement provide consumers in terms of
time and money saved?
b. What costs would the requirement impose on consumers?
c. What benefit would the requirement provide businesses in terms
of time and money saved?
i. Would complying with the requirement allow businesses to
eliminate or reduce certain other business practices? If so, which
business practices?
ii. What are the savings in terms of time and money for eliminating
or reducing such business practices?
d. What costs would the requirement impose on businesses?
e. What modifications, if any, should the Commission make to the
requirements to reduce the costs imposed on businesses, particularly
small businesses? \54\
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\54\ Please use the U.S. Small Business Administration's
(``SBA'') standards for defining ``small business.'' See Size
Standards, <a href="https://www.sba.gov/federal-contracting/contracting-guide/size-standards">https://www.sba.gov/federal-contracting/contracting-guide/size-standards</a>. SBA defines ``small business'' by NAICS code
based on either employment levels or annual receipts.
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f. Would the requirement interfere with legitimate business
practices?
i. If so, what types of legitimate business practices would be
affected and how?
ii. How can the Commission modify the requirements to accommodate
these legitimate business practices?
g. Does the requirement overlap or conflict with existing Federal,
State, or local laws or regulations?
i. If so, how?
ii. Should any Rule amendment address such overlaps or conflicts?
If so, why, and how? If not, why not?
2. The Commission seeks information on both (i) the current costs
\55\ for complying with existing laws on negative options and (ii) how
those costs will change if the Commission adopts all or part(s) of the
Vacated Rule.
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\55\ Current costs include fixed costs as well as costs that
vary with production.
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a. For the average negative option seller, what are the current
costs to comply with existing Federal, State, and local laws or
regulations governing negative options?
b. How, and to what extent, would each of these four requirements
change the costs to comply with existing Federal, State, and local laws
or regulations governing negative options?
i. Please provide separate estimates for each cost component,
including costs to read and understand the rule, costs to update
procedures and train personnel on compliance, costs to revise web pages
and apps for compliance, costs to modify existing contracts and
subscriptions, costs to update disclosures, costs for record keeping,
and any other compliance costs.
ii. Would any other requirement from the Vacated Rule change the
costs of compliance? If so, how and to what extent?
c. How do the costs in your responses to the above questions vary
by industry?
d. How do the costs in your responses to the above questions vary
by business size?
e. How do the costs in your responses to the above questions vary
by specific business processes, including third-party services, used to
market and operate the negative option program (e.g., how do costs vary
by type of system for managing customer relationships or
subscriptions)?
f. How do the costs in your responses to the above questions vary
over time (in real dollars), in particular between initial first year
compliance efforts and subsequent years?
3. What evidence supports your responses to the above questions?
4. What evidence do you have that either supports or contradicts
the Final Regulatory Analysis, the Final Regulatory Flexibility Act
Analysis, and the Paperwork Reduction Act Analysis in the Final Rule
document for the Vacated Rule? \56\
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\56\ 89 FR 90476, 90517-37 (Nov. 15, 2024) (Sections X, XI, and
XII).
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E. Questions About Exemptions
The Commission will consider how to handle industry requests for
exemptions from the requirements of a new rule. The Vacated Rule, for
example, affirmed existing procedures for petitioning the Commission
for an exemption and specified these procedures apply to petitions for
both partial and full exemptions.\57\ The Commission could take a
similar approach to exemptions under a new rule and additionally
consider supplementing the existing petition process with new
procedural or substantive requirements. Alternatively, the Commission
could expressly exempt particular segments of the marketplace from a
new rule or apply any new requirements only to specific industries
where unlawful negative option marketing practices are prevalent. The
following questions solicit information and evidence for making this
determination.
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\57\ Vacated Rule at Sec. 425.8. Section 18 of the FTC Act
provides that any affected person may petition the Commission for an
exemption from a rule proscribing unfair or deceptive acts or
practices. 15 U.S.C. 57a(g). The Commission Rules incorporated this
right into 16 CFR 1.16. The vacated Rule specified this right covers
both petitions for partial and full exemptions and designated the
procedures under 16 CFR 1.31 for resolving such petitions.
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1. What procedure should the Commission use to decide requests for
exemptions?
2. What criteria should the Commission use to decide requests for
exemption?
3. What types of evidence should the Commission require petitioners
to submit to support their exemption request?
4. How broadly should the Commission grant exemptions to such a new
rule?
a. Should exemptions be limited to individual businesses or should
it cover entire industries?
b. Should it be limited in time or in any other manner?
5. Should a new rule exempt certain businesses or industries from
any of the four requirements discussed in Section VIII.D above or any
other requirement from the Vacated Rule?
a. If so, which requirement(s) and why?
6. Conversely, should a new rule apply to certain industries only?
If so, which industries, and why?
7. What evidence supports your responses to the above questions?
IX. Comment Submissions
The public is invited to submit comments on this document. The
Commission will consider all timely and responsive comments it receives
on or before April 13, 2026. Because of the agency's heightened
security screening, postal mail addressed to the
[[Page 12325]]
Commission will be delayed. We strongly encourage you to submit your
comments online through the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website. If you
prefer to file your comments on paper, write ``Negative Option Rule
ANPRM, Project No. P064202'' on your comment and on the envelope, and
mail your comment by overnight service to: Federal Trade Commission,
Office of the Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144
(Annex N), Washington, DC 20580.
For comments submitted online through the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website, you are solely responsible for making sure
your comment does not include any sensitive personally identifiable or
health information. In addition, your comment should not include any
``trade secret or any commercial or financial information which . . .
is privileged or confidential''--as provided by section 6(f) of the FTC
Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)--
including in particular competitively sensitive information such as
costs, sales statistics, inventories, formulas, patterns, devices,
manufacturing processes, or customer names.
Your comment--including your name and your State--will be placed on
the public record of this proceeding, including, to the extent
practicable, on the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website. Once your
comment has been posted there--as legally required by FTC Rule 4.9(b)--
we cannot redact or remove your comment from that website unless you
submit a written confidentiality request that meets the requirements
for such treatment under FTC Rule 4.9(c), and the General Counsel
grants that request. Such requests must be clearly labeled
``Confidential,'' must include the factual and legal basis for the
request, and must identify the specific portions of the comment to be
withheld from the public record. See FTC Rule 4.9(c).
The FTC Act and other laws that the Commission administers permit
the collection of public comments to consider and use in this
proceeding, as appropriate. For information on the Commission's privacy
policy, including routine uses permitted by the Privacy Act, see
<a href="https://www.ftc.gov/site-information/privacy-policy">https://www.ftc.gov/site-information/privacy-policy</a>.
X. Regulatory Review
E.O. 14215 requires all executive branch departments and agencies
to submit all their proposed and final significant regulatory actions
to the Office of Management and Budget (OMB) for review. E.O. 12866
says that agencies should assess the costs and benefits of available
regulatory alternatives and, if regulation is necessary, select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, and
distributive impacts).
By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2026-04952 Filed 3-12-26; 8:45 am]
BILLING CODE 6750-01-P
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</html>Indexed from Federal Register on March 13, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.