Advertising Law Blog

The New York Law Journal published an article on April 13, 2023 authored by Olshan partner, Chair of the firm's Advertising, Marketing and Promotion's Practice and Co-Chair of the Brand Management & Protection Practice Andrew Lustigman and associate Morgan Spina entitled "FTC's Proposed New Rules for Businesses Selling Subscriptions Heighten Compliance Obligations." The Federal Trade Commission (FTC) recently proposed a new rule amending its Negative Option Rule. The rule aims to create additional requirements for companies using subscriptions, automatic renewals, and similar programs to sell their goods and services. As a result, the new proposed rule has garnered significant attention from marketers, businesses, lawyers, and commentators. This is an effort by FTC to update the original rule, which was first implemented in 1973. Andy and Morgan provide details on the implications of the proposed rule. While they see the feedback that the “click to cancel” aspect is receiving as “duly warranted and appropriate,” they draw attention to how the rule would interact with varying state laws. “The Proposed Rule purports to resolve the ‘patchwork of laws and regulations,’ both on the federal and state levels, that currently apply to businesses operating in negative option or subscription space,” they write. “Unfortunately, the Proposed Rule would not supersede, alter, or affect any state laws, except to the extent there is an inconsistency. Further, a state statute would not be inconsistent if it provided greater protection to the consumer than the Proposed Rule.”

To read the full article, click here (subscriber-based).