Restore Online Shoppers' Confidence Act (ROSCA), 15 U.S.C. §§ 8401–8405, and the FTC Negative Option Rule (16 CFR Part 425)

What it requires

Section 4 of ROSCA (15 U.S.C. § 8403) makes it unlawful to charge a consumer for goods or services sold in a transaction effected on the internet through a negative option feature unless the seller (1) clearly and conspicuously discloses all material terms before obtaining the consumer's billing information, (2) obtains the consumer's express informed consent before charging a card, bank or other financial account, and (3) provides simple mechanisms to stop recurring charges. ROSCA takes its definition of a negative option feature from the FTC's Telemarketing Sales Rule: a provision under which the customer's silence or failure to take an affirmative action to reject goods or services or to cancel is treated by the seller as acceptance. A violation is treated as a violation of an FTC trade regulation rule and carries the FTC Act's penalties (§ 8404); state attorneys general may also sue in federal court for injunctive relief (§ 8405). The statute does not define a simple mechanism, and FTC orders set terms case by case. The Amazon order of September 2025 requires a way to cancel Prime that is not difficult, costly or time-consuming and uses the same method consumers used to sign up; the proposed order filed with the FTC's ROSCA complaint against Shutterstock in May 2026 would require disclosure of material terms, express informed consent and simple cancellation mechanisms for negative option features. The vacated 2024 amendments would have applied similar duties to negative option programmes in any media, adding a ban on misrepresenting material facts and a cancellation mechanism that immediately halts charges. With the pre-2024 text restored, the rule again applies only to prenotification plans for the sale of goods.

Why it bears on this field

Auto-renewing weekly, monthly and annual passes and free trials that convert to paid plans fit ROSCA's definition of a negative option feature, and where they are sold online the three duties attach to the sign-up screen, the charge and the cancellation path. Single coin bundles that do not renew are outside that definition. The FTC has invoked ROSCA against a mobile app's weekly plan: the complaint filed on its referral in September 2025 against Iconic Hearts, operator of the Sendit app, alleges that buyers of its Diamond Membership were not clearly told they would be billed as much as $9.99 every week rather than paying a one-time fee. In the pending Uber One case the FTC alleges that free-trial users were charged before the trial ended and that cancelling could take as many as 23 screens. The restored rule covers only prenotification plans for the sale of goods, which the FTC says leaves most modern negative option marketing outside it.

Open questions

• When a subscription is sold and cancelled through Apple's or Google's billing and account settings, how are ROSCA's disclosure, consent and cancellation duties divided between the app developer and the app store?
• Will the FTC follow its March 2026 advance notice with a proposed rule, and would a new rule reach beyond prenotification plans to app subscriptions sold online?
• What counts as a simple mechanism under § 8403(3), which the statute leaves undefined, beyond the terms set in orders such as the Amazon order and the proposed Shutterstock order?

Timeline

• 2010-12-29The Restore Online Shoppers' Confidence Act is enacted as Public Law 111-345. Source (opens in a new tab)
• 2024-11-15The FTC publishes its amended Negative Option Rule, adopted by a 3-2 vote in October 2024, extending the rule to negative option programmes in any media. It takes effect on 14 January 2025, with compliance for certain parts deferred to 14 May 2025 and later to 14 July 2025. Source (opens in a new tab)
• 2025-07-08The Eighth Circuit vacates the amended rule in its entirety in Custom Communications, Inc. v. FTC (No. 24-3137), holding that the FTC failed to conduct the preliminary regulatory analysis required by section 22 of the FTC Act. Source (opens in a new tab)
• 2025-09-25The FTC announces a settlement of its case against Amazon over Prime enrolment and cancellation, brought under the FTC Act and ROSCA: a $1bn civil penalty, $1.5bn in refunds, and a cancellation method that uses the same method consumers used to sign up. Source (opens in a new tab)
• 2025-09-29The Department of Justice, on referral from the FTC, files a complaint in the Central District of California against Iconic Hearts Holdings, operator of the Sendit app, alleging violations of the COPPA Rule, the FTC Act and ROSCA, including failure to disclose that its Diamond Membership billed as much as $9.99 every week. Source (opens in a new tab)
• 2025-12-15The FTC, joined by 21 states and the District of Columbia, files an amended complaint against Uber over its Uber One subscription, seeking civil penalties for alleged ROSCA violations. Source (opens in a new tab)
• 2026-02-12An FTC final rule restores the Negative Option Rule to its text before the 2024 amendments, effective the same day. Source (opens in a new tab)
• 2026-03-13The FTC publishes an advance notice of proposed rulemaking, announced on 11 March, asking whether the rule needs amending or replacing; comments close on 13 April 2026. Source (opens in a new tab)
• 2026-05-13The FTC files a complaint against Shutterstock under the FTC Act and ROSCA in the Southern District of New York, with a proposed settlement order under which Shutterstock would pay $35m and would have to disclose material terms, obtain express informed consent and maintain simple cancellation mechanisms for negative option features. Source (opens in a new tab)