The Federal Trade Commission (FTC) published an Advance Notice of Proposed Rulemaking (ANPRM) on March 13 seeking public comment on the Negative Option Rule. It aims to address the procedural defects that the Eighth Circuit found in the prior “Click-to-Cancel” rule, which found that the FTC failed to adequately perform the preliminary regulatory analysis for trade regulation rules having an impact of $100 million or more. The ANPRM asks the public to:
- weigh in on the current Rule
- whether proposed amendments are needed; and
- about potential regulatory alternatives to address deceptive or unfair negative option practices.
Specifically, the FTC is seeking the following information to ensure its rulemaking adequately responds to concerns from both consumers and industry:
- Marketplace for Negative Option Programs. The Commission seeks information on the extent to which businesses market products and services using negative options and how these negative option programs operate;
- Negative Option Practices. The Commission seeks information on practices that 1) prevent consumers from understanding the terms of a negative option program, 2) result in consumers being enrolled without their express informed consent, or 3) deter consumers from canceling their enrollments, and whether such practices are prevalent in the marketplace;
- Addressing Unlawful Practices. The Commission seeks information on specific ways to address unfair or deceptive negative option practices, including retaining the current Rule, adopting provisions of the vacated 2024 Rule or some other provisions, or implementing alternatives to regulation (such as educating consumers and businesses on how to avoid unlawful negative option practices), and the costs and benefits of each of these measures; and
- Supporting Studies and Data. The Commission encourages commenters to submit supporting market studies, economic data, or other empirical evidence.
Comments are due on April 13.
