FTC Negative Option Rulemaking Resumes in 2026: Key Compliance Risks for Subscription and Auto-Renewal Programs

Key Takeaways

• The Federal Trade Commission (“FTC”) restarts negative option rulemaking after the court vacated the 2024 rule. The agency’s March 2026 Advance Notice of Proposed Rulemaking (“ANPRM”) has placed a renewed focus on subscription, auto-renewal, and continuity programs under Section 5 of the FTC Act.
• Core compliance risks remain unchanged. Disclosure, consent, and cancellation requirements from the vacated 2024 rule are expected to reappear in revised form.
• Companies using subscription or auto-renewal models should act now. With the FTC accepting public comments through April 13, 2026, companies have a near-term opportunity to provide input on regulatory standards before potential civil penalty exposure is reintroduced.

FTC Restarts Negative Option Rulemaking After Court Vacated 2024 Rule

On March 11, 2026, the FTC issued an ANPRM to restart its efforts to regulate negative option marketing practices under Section 5 of the FTC Act. For companies that rely on subscription or auto-renewal models, this development places these practices back on an active regulatory agenda.

This action follows the U.S. Court of Appeals for the Eighth Circuit’s July 2025 decision vacating the commission’s 2024 Negative Option Rule due to procedural deficiencies, specifically the agency’s failure to conduct a required preliminary regulatory analysis.

Negative option marketing refers to commercial arrangements — such as prenotification programs, continuity plans, automatic renewals, and free-to-pay or nominal-fee-to-pay conversions — where a consumer’s silence or failure to cancel is treated as acceptance of ongoing charges. These models are widely used across industries, but they have also drawn consistent FTC scrutiny, particularly where disclosures or cancellation processes are difficult for consumers to understand or complete.

The FTC’s new ANPRM effectively restarts the rulemaking process and seeks public comment on whether to revise and expand its existing 1973 rule governing prenotification negative option plans. The commission is evaluating how to modernize its regulatory framework to address today’s digital subscription economy.

The ANPRM emphasizes consumer protection concerns related to recurring charges, inadequate disclosures, and barriers to cancellation, and reflects continued FTC scrutiny of subscription-based business models. Comments are due by April 13, 2026.

Why the 2024 Rule Was Vacated

The FTC’s 2024 version of the vacated rule would have made it an unfair or deceptive practice to:

• Misrepresent any material fact made while marketing using a negative option feature.
• Fail to clearly and conspicuously disclose material terms prior to obtaining a consumer’s billing information in connection with a negative option feature.
• Fail to obtain a consumer’s express informed consent to the negative option feature before charging the consumer.
• Fail to provide a simple mechanism to cancel the negative option feature and immediately halt charges.

Industry stakeholders previously raised significant concerns about the breadth and ambiguity of the 2024 rule. Key objections included:

• Subjecting any material misstatement related to the transaction to substantial civil penalties.
• Lack of clarity around key terms such as “material,” “simple mechanism,” and “clear and conspicuous.”
• Requiring separate consent for different aspects of a transaction.
• Singling out negative option models for penalty-bearing regulations that could discourage the use of subscription models.

These concerns are likely to affect stakeholder engagement during the current rulemaking process.

Key Questions the FTC Is Asking Stakeholders

The notice seeks comments on a number of detailed questions. Some of the most critical are:

• Is there a need for a new or revised Rule?
• What are the costs and benefits of the new Rule compared to alternatives?
• What is the scope of negative option marketplace?
• On average, how long does it take consumers to enroll in a negative option program?
• On average, how long does it take to cancel a negative option enrollment?
• What unfair or deceptive practices do consumers encounter that involve negative option programs and what is the prevalence of those practices?
• Should the Rule incorporate exemptions and, if so, what exemptions?
• Which requirements of the vacated 2024 rule should be included in a new rule and what are the costs and benefits associated with those requirements?

Importantly, the FTC is seeking empirical evidence to support stakeholder comments. Submissions supported by concrete data and real-world examples are likely to carry more weight with the FTC.

What This Means for Subscription and Consumer-Facing Businesses

Businesses that rely on subscription, automatic renewal, or continuity models should expect continued regulatory scrutiny and potential expansion of compliance obligations.

Even in the absence of a final rule, the FTC can, and does, bring enforcement actions under existing authority. Companies should evaluate current disclosure, consent, and cancellation practices with this in mind.

The outcome of this rulemaking process remains uncertain, but the issues under review are well established. Companies that engage in the comment process and assess their practices now will be better positioned as the rulemaking progresses.

If you have any questions or are considering filing a comment, please contact AGG Intellectual Property of counsel and former assistant director at the FTC’s Division of Advertising Practices, Rich Cleland.