Congress Moves to Nullify New FTC Rule on Subscription Traps, Keeping Auto-Renewal Status Quo

This Joint Resolution is Congress stepping in to hit the ‘undo’ button on a specific consumer protection regulation issued by the Federal Trade Commission (FTC). Specifically, it aims to nullify the FTC’s new “Negative Option Rule,” which was published on December 26, 2024. If this resolution passes, that new FTC rule—which was designed to make it harder for companies to enroll you in automatic subscriptions and harder to cancel them—will be wiped clean as if it never existed.

The Fine Print That Won't Change

To understand the impact, you have to know what the FTC rule was trying to fix. The “negative option” is that classic situation where you sign up for a “free trial” or a discounted service, and unless you actively cancel it before a certain date, you are automatically charged the full price. Think of all those streaming services, software subscriptions, or even physical product clubs. The rejected FTC rule would have required companies to make cancellation just as easy as signing up, and it would have forced clearer disclosures about recurring charges.

By rejecting this rule through the Joint Resolution, the current, less-strict rules governing these auto-renewals remain in place. For consumers, this means companies are not required to provide the simplified cancellation mechanisms or the increased transparency the FTC had mandated. If you’re already juggling five different subscriptions, you’ll still need to navigate varying, often complicated, customer service portals or phone trees just to stop being charged.

Who Wins and Who Pays

On one side, businesses that rely heavily on subscription models—from large tech companies to smaller e-commerce sites—get to breathe a sigh of relief. The FTC rule would have meant overhauling their billing systems, updating their sign-up pages, and potentially hiring more staff for customer service to handle easier cancellations. This resolution saves them those compliance costs and administrative headaches, effectively preserving their current revenue streams derived from customers who forget to cancel or find the process too difficult.

On the flip side are the consumers. The FTC’s regulatory goal was to stop “subscription traps” and “dark patterns” that trick people into recurring charges. For the average person aged 25 to 45 who is already managing mortgages, childcare, and rising inflation, every dollar counts. This resolution takes away a tool that would have protected them from accidental charges and made it easier to manage their budgets. The cost of this action isn't a direct tax, but rather the continued time, effort, and occasional surprise charges associated with untangling unwanted subscription services that would have been regulated under the nullified rule.

The Bigger Picture: Congressional Override

This move uses a specific legislative tool called the Congressional Review Act (CRA), which allows Congress to overturn specific regulations issued by federal agencies like the FTC. While it’s a legitimate power, using it here means Congress is effectively overriding the judgment of the agency specifically tasked with consumer protection. The result is a clear message: when it comes to automatic subscriptions, Congress is prioritizing reduced regulatory burden for businesses over the specific, strengthened consumer safeguards the FTC had tried to implement.