On May 9, 2025, the U.S. Federal Trade Commission (FTC) announced that the deadline for companies to comply with its “click-to-cancel” rule (the Rule) would be postponed until July 14, 2025. The Rule, which imposes new requirements on businesses that offer subscription services or “negative options,” was set to take effect on May 14, 2025. But according to the FTC, a “fresh assessment of the burdens that forcing compliance by this date would impose” led the FTC to defer enforcement of the Rule until July 14, 2025 to properly account for the “complexity of compliance” and ensure that companies have ample time to conform their business practices to the new Rule.
The Rule seeks to clarify existing law regulating negative options, which lacks clarity and specificity. Under the Rule, businesses will be required to make clear and conspicuous disclosures of material terms, obtain consumers’ express informed consent to be charged at the time of enrollment, and obtain customers’ separate express informed consent to the negative option feature. Businesses will also be required to provide simple mechanisms for customers to “immediately” cancel their subscriptions. The Rule provides some clarity but lacks details, leaving numerous questions about how companies fully comply with the Rule. The Rule has already been the subject of several lawsuits in which businesses and industry groups have asserted that the FTC ignored rulemaking requirements — including a requirement to conduct an economic analysis of the Rule and the cost of compliance with it — in order to fast track the Rule’s implementation.
Though the 60-day postponement is a welcome reprieve, companies should continue their efforts to update subscription marketing and cancellation practices in order to comply with the Rule. For more information about the substantive requirements of the Rule and what businesses need to do before July 14, please contact one of the Sidley lawyers listed below.
