The United States Court of Appeals for the Eighth Circuit has recently vacated the Federal Trade Commission’s revised Negative Option Rule, also known as the “Click to Cancel” Rule [hereinafter the “Rule”], on procedural grounds, citing various flaws during the regulation-making process.[1]
We previously reported that the Rule was scheduled to go into effect on July 14. The Eighth Circuit’s decision means that the Rule is not currently in effect.
The Rule, if it had become effective, would have established disclosure, consent, and cancellation requirements for companies utilizing negative options. A “negative option” is an arrangement where goods or services are provided based on a consumer’s silence—a failure to take some affirmative action to reject or cancel. For example, a subscription service with automatic renewal features is a common negative option program.
It is not yet clear whether there is a path forward for the Federal Trade Commission. The FTC may appeal the Eighth Circuit’s decision; or, on the other hand, the three Republican FTC Commissioners, two of whom dissented from the issuance of the Rule, may abandon the efforts to implement the rule.[2]
We will further advise on the status of the Rule, once the intentions of the FTC are revealed.
Wiggin and Dana possess extensive knowledge and experience in navigating both federal and state consumer protection laws and regulations, including the many Guides and Trade Regulation Rules adopted by the Federal Trade Commission.
[1] Custom Communications, Inc. v. Federal Trade Commission, 2025 WL 1873489 (8th Cir. July 8, 2025).
[2] The FTC is authorized to have five Commissioners with the restriction that not more than three commissioners may be of the same political party. See 15 U.S.C. § 41. Shortly after he was inaugurated, President Trump fired the two Democrat Commissioners, Rebecca Slaughter and Alvaro Bedoya. The actions of the President are the current subject of litigation that may eventually be decided by the United States Supreme Court. See Slaughter v. Trump, 1:25-cv-00909 (D.D.C.)