/>iOn July 8, 2025, the U.S. Court of Appeals for the Eighth Circuit vacated the Federal Trade Commission’s “Click-to-Cancel” Rule, which was intended to govern negative-option offers.
Negative-option offers are widely used. They include all offers in which the seller interprets a consumer’s silence or failure to take affirmative action as acceptance or continuing acceptance of an offer. That includes, for instance, “automatic renewal” offers, like magazine and streaming service subscriptions, in which sellers automatically renew a consumer’s subscription when it expires, unless the consumer affirmatively cancels the subscription; and “free trial” offers, in which a good or service is offered for free (or at a reduced price) for a trial period and, after the trial period, at a higher price unless a consumer affirmatively cancels or returns the good or service.
As written, the Click-to-Cancel Rule prohibits negative option sellers from making misrepresentations about the negative option and requires them to (1) clearly and conspicuously disclose all material terms; (2) obtain each consumer’s express, informed consent for the negative-option feature; and (3) provide a simple cancellation mechanism for the negative-option feature, with that mechanism being “at least as easy to use as the mechanism the consumer used to consent” to the negative-option feature. Absent the Eighth Circuit’s decision, the Click-to-Cancel Rule would have become effective as of July 14, 2025.
In vacating the rule, the Eighth Circuit held that the FTC failed to comply with procedural requirements governing its rulemaking, and thus deprived the petitioners—comprised of various industry associations and individual businesses—of a fair opportunity to participate in the rulemaking process.
Under its current leadership, the FTC may not ask the Supreme Court to review the Eighth Circuit’s decision or initiate a new rulemaking process to resurrect the Click-to-Cancel Rule.
But businesses using negative-options offers should not let their guards down, even if the Click-to-Cancel rule is not resurrected. The FTC has other tools available to police negative-option offers, including the Restore Online Shoppers’ Confidence Act (ROSCA), the Telemarketing Sales Rule (TSR), and its authority under Section 5 of the FTC Act to prevent unfair and deceptive acts and practices. State Attorneys General are also actively enforcing state-level automatic renewal rules, many of which have been enacted or amended in recent years to more closely regulate negative-option offers. Indeed, more than half the states now have automatic-renewal laws, and many of those laws are as strict or stricter than the FTC’s now-vacated Click-to-Cancel Rule. Beyond government enforcement actions, businesses should also remain vigilant given the risk of consumer class actions challenging negative-option offers.
