FTC Signals Restart On Negative Option Rulemaking

In July 2025, the Eighth Circuit vacated the Federal Trade Commission's (FTC) Negative Option Rule, which was set to go into effect that month. You can find more details in our blog post on that decision, but, in short, the court found that the FTC failed to satisfy certain procedural hurdles when promulgating the rule. As we noted in that post, even though the Negative Option Rule was issued by the Biden administration, Republican commissioners previously signaled support for many of its provisions. That support has turned into real action. We do not know yet what the substance of the rule will look like, but there is clear intent to restart the rulemaking process.

Specifically, on January 30, the FTC submitted a draft Advance Notice of Proposed Rulemaking (ANPRM) to the Office of Information and Regulatory Affairs (OIRA). If OIRA approves the ANPRM, then it will be published in the Federal Register and available for public review. This action itself is notable because prior to the Trump administration, the FTC would not have sent proposed rules to OIRA for preclearance. Independent agencies like the FTC were not subject to that requirement. Since returning to office, however, President Donald Trump has issued an executive order that requires all executive branch agencies, including the FTC, to submit any "significant regulatory actions" to OIRA for review.

There will be an opportunity for public comments on the ANPRM once it is published. That period will likely be for 30-60 days, though it could be longer or subsequently extended. The FTC will then review and address those comments, which can take anywhere from months to years, before issuing the Notice of Proposed Rulemaking (NPRM), which is the stage where the agency issues an actual proposed rule. Following that will be another round of comments. Finally, assuming the FTC chooses to proceed, it will issue a final rule. Rulemaking takes time, and we are likely years away from a new rule coming into effect.

With respect to the substance of any future rule, the ANPRM, once published, is unlikely to provide much detail on specific rule language. Instead, an ANPRM is typically limited to what is required under the FTC Act – a "brief description of the area of inquiry under consideration, the objectives which the Commission seeks to achieve, and possible regulatory alternatives under consideration by the Commission." We likely won't have more details on what a rule would look like until the FTC issues an NPRM, but the ANPRM will provide us with some better understanding of where the agency may be heading.

What we expect is that any future rule will include some of the provisions from the previous Negative Option Rule. This includes expanding on the basic requirements in the Restore Online Shoppers' Confidence Act (ROSCA) to make clear that disclosure, consent, and easy cancellation for subscription programs are all required under federal law. The featured "click to cancel" requirement for online subscriptions could also be included. Whether or not this proposal repeats the prior Negative Option Rule's requirement for a checkbox or similar consent mechanism to the automatic renewal terms remains to be seen. The one provision that we can safely expect will not repeat is the broad prohibition on misrepresentations by any company selling subscriptions. This would have effectively made any misleading statement by a subscription seller actionable under the rule, as opposed to just Section 5 of the FTC Act. The rule will carry stricter penalties, particularly in a post-AMG Capital world where the FTC cannot go to federal court to obtain equitable monetary relief for violations of Section 5. FTC Chairman Andrew Ferguson voted no on the prior Negative Option Rule, specifically objecting to this provision as an overreach when doing so.

If the FTC continues forward, this is a process that will last several years. And we won't have more details on any proposed rule for several months, at best. But companies and industries may want to have their voices heard and will have their first opportunity to weigh in once the ANPRM is published in the Federal Register, so stay tuned.

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