As we have reported previously, at the end of 2025, the Lina Khan-led Federal Trade Commission (“FTC”) completed the process of updating its Negative Option Rule by finalizing the Rule Concerning Recurring Subscriptions and Other Negative Option Programs (the “Final Rule”). The Final Rule’s expansive prohibition against misrepresenting any material fact made while marketing using a negative option feature went into effect on January 14, 2025, with the balance of the substantive requirements scheduled to go into effect this week on May 14, 2025. These provisions include the requirements to obtain a consumer’s express informed consent to the negative option feature before charging the consumer and to provide consumers with a simple mechanism to cancel the recurring charges.
On Friday May 9, 2025, less than a week before the slated May 14, 2025 effective date, the now Andrew Ferguson-led FTC released a statement announcing that the effective date is being extended by sixty (60) days to July 14, 2025. According to the FTC’s statement, this move is being made in order to afford companies “ample time” to confirm with the Final Rule. Although the FTC states that it will begin enforcing the Final Rule starting on the new effective date, it does leave the door open for potential changes to the Final Rule by stating that it is open to amending the Final Rule in the event that “enforcement experience exposes problems” with the Final Rule.
We will continue to monitor the Final Rule and the FTC’s approach to compliance. In the meantime, companies should continue to move toward compliance, keeping in mind the new July 14, 2025 deadline.
- Associate
As a member of Olshan’s Brand Management and Protection Group, Morgan helps guide clients on all facets of brand management, including privacy, advertising and intellectual property optimization, enforcement and defense ...