United States of America: Federal Trade Commission amendments to Negative Option Rule was terminated

On 8 July 2025, the United States Court of Appeals for the Eighth Circuit vacated in full the Federal Trade Commission’s (FTC) amended Negative Option Rule, which included the “Click-to-Cancel” requirement mandating that sellers provide a cancellation mechanism as simple as the sign-up process. The Rule, finalised on 15 November 2024, extended the scope of the original 1973 regulation to all negative option marketing formats—including automatic renewals, continuity plans, and free-to-pay conversions—across all media. It imposed specific order termination obligations by requiring businesses to allow consumers to halt recurring charges via a streamlined cancellation process equivalent in simplicity and prominence to the method of enrolment. Additionally, it prohibited obstructive practices such as misrepresenting material facts, failing to disclose terms prior to billing, and not obtaining express informed consent before initiating charges. The Court determined that the FTC’s failure to conduct a preliminary regulatory analysis, as required under section 22 of the FTC Act (15 U.S.C. § 57b-3(b)(1)), despite findings that the Rule’s annual impact would exceed USD 100 million, constituted prejudicial procedural error under 5 U.S.C. § 706(2)(D). As a result, the Rule—including its order termination provisions—was vacated in its entirety.