Cancel Culture, FTC Style: What Subscription-Based Businesses Need to Know about the FTC’s New “Click-to-Cancel” Rule

Last fall, the FTC published the Rule Concerning Recurring Subscriptions and Other Negative Option Programs, or the “Click-to-Cancel Rule.” The Rule targets practices where cancellation is intentionally more difficult than enrollment, requiring that the opt-out process be as simple as opting in. This article provides a concise overview and practical guidance for complying with the Rule’s requirements.

Scope and Summary of the Rule

The Click-to-Cancel Rule applies to any “negative-option” program offered in any medium (website, mobile app, phone, in-person). It reaches both business-to-consumer (B2C) and business-to-business (B2B) arrangements whenever a customer’s silence or inaction (hence, “negative option”) triggers an ongoing charge. This includes a wide range of offerings such as software subscriptions, SaaS tools, recurring product deliveries, and services like streaming platforms or gym memberships.

Compliance Date

• Compliance deadline: July 14, 2025
• Multiple industry lawsuits seek to block or narrow the rule, but no court has stayed enforcement as of publication (June 9).

Key Requirements

• Easy, same-medium cancellation. For instance, if it takes only a few clicks to enroll online, cancellation much follow a comparatively simple process using the same channel of communication.
• Single “save” attempt. Sellers may attempt to “save” the cancellation only once. Any further upsell, survey or attempt to retain the consumer must be optional and require the consumer’s express consent before proceeding. This limits retention tactics to a single interaction, unless the consumer affirmatively agrees to more.
• Annual renewal reminders. Renewal reminders are required for subscriptions involving non-physical goods or services (e.g., streaming, SaaS). Renewal reminders must include key terms and instructions for how to cancel.
• Clear, conspicuous disclosures & express informed consent. All material terms (price, renewal cadence, cancellation method) must be presented up front, and consent for renewal must be captured separately from other terms and conditions.
• No misrepresentations & record-keeping. Misstating any material fact regarding subscription or renewal is viewed as per se or inherently deceptive, and records of consent and cancellations must be retained for at least three years.
• Civil penalties. Because the Rule was promulgated under the FTC’s trade regulation authority, violations are enforceable via civil penalties. Each violation can draw FTC penalties exceeding $50,000 per instance, plus injunctive relief.

Relationship to Other Laws

The rule adds a federal floor but does not preempt stricter state automatic-renewal laws (e.g., California, New York) except where the provisions directly conflict. Companies must therefore comply simultaneously with the Click-to-Cancel Rule, state auto-renewal statutes, and the existing federal Restore Online Shoppers’ Confidence Act and Telemarketing Sales Rule.

A Note on B2B Implications

Although most state auto-renewal statutes exempt B2B contracts, the FTC deliberately included B2B subscriptions within the scope of this new Rule. As such, standard-form SaaS, equipment-lease or membership agreements that auto-renew appear to trigger the rule. However, the FTC has signaled that individually negotiated B2B agreements will not be its enforcement focus.

In light of the FTC’s current stance, a more natural target for B2B scrutiny, if there will be any at all, would seem to be where there are both great disparities in sophistication between the parties (a large market-leader on one side and small businesses without formal legal/procurement on the other) and subscription cancellation processes that appear intentionally designed to frustrate.

Businesses are advised to monitor developments in this area to stay informed of how (if at all) the FTC chooses to enforce the rule and whether further “best practices” guidance may arise regarding auto-renewing subscriptions in B2B contexts.

Guidance for Complying With the Click-to-Cancel Rule

If your organization offers consumer-facing subscriptions (or templatized, fully online B2B subscriptions):

• Map every sign-up flow and create an equivalent “one-click” cancellation path in the same medium.
• Review disclosures to ensure all material terms appear clearly before payment is taken, and secure standalone consent for the negative-option or auto-renewal feature.
• Configure systems to deliver annual renewal reminders for digital services.
• Train customer-experience and retention teams to limit themselves to one save attempt.
• Update record-retention schedules to preserve consent and cancellation logs for at least three years.

If your subscriptions target large enterprises through negotiated contracts:

• Confirm whether any portions of your contracting process rely on standard online enrollment; if so, implement the same-medium cancellation pathway.
• Document negotiations to demonstrate the contract was individually bargained, reducing the likelihood of FTC scrutiny.
• Monitor forthcoming FTC guidance and litigation outcomes that may refine B2B expectations.

Additional Assistance

Robinson Bradshaw attorneys are available to help your organization assess the applicability of the Click-to-Cancel Rule, align subscription practices with overlapping state and federal requirements, and respond to emerging guidance and litigation developments. Although the FTC has not yet issued detailed compliance guidance, particularly for B2B engagements, Robinson Bradshaw will continue to monitor developments and provide updates as new information becomes available. Please contact a member of your Robinson Bradshaw client service team to arrange for additional assistance.