The Federal Trade Commission (“FTC”) recently announced its final “click-to-cancel” rule. The rule applies to all consumer subscriptions that renew automatically, as well as to other “negative option” contracts—meaning contracts in which a consumer’s failure to expressly reject an offer to sell a product or service or to cancel an agreement results in the consumer’s acceptance of the product, service, or agreement (collectively, “subscriptions”).

The rule is designed to provide consumers with simple and easy to find options to cancel subscriptions, immediately halting recurring charges. It also requires that consumers who sign up for subscriptions online cannot be forced to interact with a live or virtual representative, like a chatbot, to cancel. And, it imposes disclosure, consent, and record-keeping obligations on subscription sellers.

The rule was published in the Federal Register on November 15, making its disclosure, consent, and click-to-cancel requirements effective on May 14, 2025. Industry groups have already challenged the rule in the federal court, but no relief has been granted yet. As such, businesses should consider reviewing their subscription contracts and developing a plan to comply with the rule, if required.

Many states already have statutes that govern various terms of auto-renewing consumer contracts, with others working to enact similar laws. Thus, even if the FTC’s rule is successfully challenged in court, the current focus on these consumer protections provides a good opportunity for businesses to ensure that their subscription contracts align with the auto-renewal laws enacted by various states as well as the FTC’s requirements.