On Wednesday, the Federal Trade Commission (FTC) issued a call for comments in response to its Advance Notice of Proposed Rulemaking Regarding Negative Option Marketing Practices.
The call for comments comes after the Eighth Circuit struck the FTC’s previous amended Negative Option Rule because the FTC did not issue a preliminary analysis of the benefits and effects of the proposed rule and any reasonable alternatives, because it initially failed to treat the rule as “economically significant” to the national economy.
The FTC has not abandoned the proposals in the previous rule. Instead, the FTC’s primary goal appears to be to remedy the issues the court raised when invalidating the previous rule (which the FTC refers to as the “Vacated Rule”).
The FTC has asked what requirements from the Vacated Rule are needed to address unlawful negative option practices prevalent in the marketplace? The FTC’s other questions seek information on the current costs for complying with existing laws on negative options and how those costs will change if the agency adopts all or part(s) of the vacated rule, and whether and what exemptions should be imposed.
The FTC also asks for evidence supporting the Final Regulatory Analysis, the Final Regulatory Flexibility Act Analysis, and the Paperwork Reduction Act Analysis in the final rule document for the vacated rule.
To learn more about the Negative Option Rule or autorenewal programs, or if your organization would like to submit comments, please contact the authors.