The Federal Trade Commission (FTC) recently announced that it will delay enforcement of its new Negative Option Rule. This proposed rule was not new to 2023. This rule targets businesses selling both physical and digital subscriptions, including popular services such as streaming platforms and gym memberships. The commission unanimously voted 3-0 to delay the final implementation date, pointing to worries about the complexity of compliance requirements.
Under the Negative Option Rule, companies should give customers an easy-to-find option to cancel their subscriptions. Customers need to be able to cancel in the same way they enrolled. If a consumer signs up for a subscription on a business’s own website, they should be able to end their subscription on that same website. This way the user has a consistently smooth experience. This action addresses the perennial complaint consumers have about difficult, opaque cancellation procedures. A common practice among businesses is to roll out effortless registration while adding roadblocks to cancellation.
An oversight report from the FTC underscored the agency’s stated priority of making it easier for consumers to understand and cancel ongoing subscriptions. It’s important to recognize that the pace of change often creates challenges and uncertainty for the business community,” a commission spokesman stated.
“Having conducted a fresh assessment of the burdens that forcing compliance by this date would impose, the Commission has determined that the original deferral period insufficiently accounted for the complexity of compliance,” – FTC
The FTC agreed that an enforcement experience that uncovers a problem with the rule would lead them to pursue a change.
“Of course, if that enforcement experience exposes problems with the Rule, the Commission is open to amending the Rule to address any such problems,” – FTC
The decision to delay seems puzzling given the timing immediately before the biggest aviation industry events. One of those events is our very own “TC Sessions AI,” taking place in Berkeley, California on June 5. Produced by TechCrunch, this annual event will include an exhibition that you can reserve space in today. For that matter, such platforms can be essential forums for talking through changing regulations and new technologies that are reshaping the subscription model landscape.
