/>iOn July 8, 2025 — just days before the Federal Trade Commission’s (FTC's) long-awaited “Click-to-Cancel” amendments to the Negative Option Rule were set to take effect — the Eighth Circuit Court of Appeals vacated the rule in its entirety.
In a sharply worded opinion, the panel held that the FTC violated 15 U.S.C. § 57b-3(b)(1) by failing to publish a preliminary regulatory analysis after determining the rule would impose more than $100 million in annual costs. That procedural lapse, the court concluded, was “fatal” to the entire rulemaking process.
Although the decision disclaims any endorsement of deceptive subscription practices, the immediate consequence is clear: the federal requirement that businesses offer consumers a seamless, “one-click” online cancellation pathway and obtain renewed consent before converting free trials to paid subscriptions is off the books for now.
Critically, the ruling does not disturb the existing 2010 Negative Option Rule, the Restore Online Shoppers’ Confidence Act or proliferating state auto-renewal statutes such as California’s A.B. 390. Companies must therefore continue to honor those frameworks, which still demand conspicuous disclosures, affirmative consent and friction-light cancellation — just not the precise one-click mechanics the FTC proposed.
What’s Next?
The path forward is uncertain. The FTC may seek panel rehearing, petition for rehearing en banc or appeal to the Supreme Court, but any new rulemaking must restart under Section 18’s Magnuson-Moss procedures — a multiyear odyssey complicated by the current Commission’s changed composition and public comments already criticizing the rule’s breadth. In the interim, plaintiffs’ counsel and state attorneys general are likely to step up enforcement with false-advertising and unfair-competition claims under the Restore Online Shoppers’ Confidence Act (ROSCA), state unfair, deceptive or abusive acts or practices (UDAP) laws and specific auto-renewal statutes.
Key Takeaways for Subscription Businesses
- Maintain your existing cancellation flow.
- Audit practices against more stringent state-level laws.
- Preserve documentation that demonstrates clear and conspicuous disclosures and unambiguous consumer consent.
- Monitor further developments, particularly any emergency motion by the FTC to stay the mandate.
- If you delayed user experience or back-end changes pending the FTC rule, consider pausing further work — but stay ready to reactivate if necessary.
