Is a Checkbox Required to Obtain Consent to Subscription Programs?
If you are a subscription marketer, you have likely heard the buzz about the Federal Trade Commission's Notice of Proposed Rulemaking (NPRM) concerning the Negative Option Rule. If implemented, the proposed rule would impact sellers of negative option offers, subscription programs, automatic renewals, continuity plans, and free-to-pay or nominal-fee-to-pay conversion offers. Many industry commentators have referred to this as the "Click-to-Cancel" rule because it would severely restrict sellers' ability to attempt "saves" when a customer requests to cancel.
Venable at Natural Products Expo West – See You in 2024!
Venable is excited to have attended Expo West 2023 in Anaheim, California. Attorneys from our FDA Group participated in private consultations in our dedicated meeting space, and the co-chairs of our FDA Group presented on FDA and FTC updates. As always, we found that both seasoned veterans and newcomers to the natural products industry were excited to learn more about the legal issues with manufacturing, marketing, and distributing foods, dietary supplements, and cosmetics. We are grateful to have many new faces that are either new to the industry or new to us, which only demonstrates the ongoing success and growth of the industry.
Click to Cancel: FTC Proposes New Rule Regulating Subscription Services and Negative Option Programs with Broad Implications
The Federal Trade Commission announced recently that its proposed rule replacing its Prenotification Negative Option Rule would result in new, expansive requirements for all forms of negative option offers, including automatic renewals, continuity plans, and free-to-pay conversations, made in all media, including Internet, telephone, in-person, and printed material.
The FTC's Proposed "Rule Concerning Recurring Subscriptions and Negative Options": Improving Regulations or Interfering with Commercial Contracts?
Payment service providers should take note of an expansive new rule proposed by the Federal Trade Commission (FTC) intended to protect consumer shoppers of goods and services sold on a subscription basis. For merchants engaged in sales of subscription-based products or services, the FTC's objective is to set forth "clear, enforceable performance-based requirements for all negative option features in all media," and the proposed rule would greatly expand the scope of FTC regulations applicable to their offers. There is, however, a nuance to the FTC's proposed rule that, if enacted, would allow the agency to regulate commercial contracts between businesses that contain automatic renewal clauses, including merchant services agreements.