The U.S. Chamber of Commerce (“Chamber”) appreciates the opportunity to submit these comments regarding the Federal Trade Commission’s (“FTC” or “Commission”) notice of proposed rulemaking (“NPRM”) to amend the Negative Option Rule (“Rule”). This NPRM represents yet another attempt by the Commission to circumvent its existing legal authorities and Congressional intent to impose substantial and burdensome regulations on the business community. Many aspects of the NPRM are ambiguous, impractical, and harmful to consumers. Moreover, the FTC fails to conduct a fulsome cost-benefit analysis of the NPRM’s impacts.
Accordingly, the Chamber urges the Commission to either withdraw or substantially revise its rule to comport with its legal authority, ensure practicality for negative option sellers, maintain consumer choice, and conduct a fulsome cost-benefit analysis that is released for public comment.
In the alternative, the Chamber recommends the following modifications:
- Modify the scope of coverage to exclude “promoting” from the definition of negative option seller and ensure the rule does not apply retroactively.
- Exclude the prohibition on misrepresentations.
- Utilize a tailored list of critical material facts for the disclosure of the negative option feature and allow all other disclosures to be in a separate location.
- Do not amend the definition of “clear and conspicuous” and retain the existing definition.
- Exclude the requirements for double opt-in consent, express consent for free trial conversions, and consent for underlying transactions for monthly services.
- Clarify the simple cancellation mechanism requirement to provide flexibility for negative option sellers.
- Exclude the limitation on saves.
- Modify the annual reminder requirement to exclude services that provide consumers with monthly bills, and provide flexibility in providing annual reminders, including through allowing opt-in consent to receive reminders.
- Strengthen the preemption to ensure a single federal standard to regulate negative options.
- Provide a two-year implementation period.
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