On March 23, 2023, the Federal Trade Commission (FTC) issued a Notice of Proposed Rule Making to amend its Negative Option Rule (the Amended Rule), and on June 23, 2023...
On March 23, 2023, the Federal Trade Commission (FTC) issued a
Notice of Proposed Rule Making to amend its Negative Option Rule
(the Amended Rule), and on June 23, 2023, it concluded its 60-day
public comment period. If the FTC finalizes the Amended Rule, it
would apply to all negative options (e.g., negative option offers,
subscription programs, automatic renewals, continuity plans, and
free-to-pay or nominal-fee-to-pay conversion offers) in all media,
and it would incorporate a series of both new and existing
obligations under the current patchwork of state and federal laws
governing negative options. Entertainment and media companies, such
as streaming, gaming, and digital publication platforms, that rely
heavily on their subscription programs to generate revenue should
pay close attention to the FTC's rulemaking on this topic in
order to mitigate the risk of litigation and can take measures now
to set up strong compliance programs.
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