Eighth Circuit Hears Challenges To FTC Negative Option Rule

On June 10, 2025, Judges Loken, Erickson, and Kobes of the U.S. Court of Appeals for the Eighth Circuit heard oral argument on consolidated challenges filed by a security services company and a number of trade associations (petitioners) to the Federal Trade Commission's Negative Option Rule (the Rule), also known as the "click-to-cancel" rule, in Custom Communications, Inc. v. Federal Trade Commission, No. 24-3137 (lead case) (8th Cir.).

As we have discussed in a prior update, the Rule imposes enrollment and cancellation requirements on businesses offering automatically renewing subscriptions. While there had been questions about whether the FTC would defend the Rule in light of then-Commissioner Andrew Ferguson's vote against the Rule's adoption in November 2024, along with the strong dissent of his fellow Republican Commissioner Melissa Holyoak, the FTC under now-Chairman Ferguson's leadership vigorously defended the Rule in a brief filed in March, and continued