This week, the Federal Trade Commission (FTC) filed a lawsuit in federal court against rideshare and delivery company Uber for allegedly deceptive subscription practices, including making it unreasonably difficult to cancel.

In the accompanying press release, FTC Chair Andrew Ferguson made clear that regulatory scrutiny of negative option and continuity programs will remain a priority: “Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel. The Trump-Vance FTC is fighting back on behalf of the American people.” The agency voted 2-0-1 to file the complaint, with Commissioner Mark R. Meador recused.

In the case, the FTC is seeking a permanent injunction and monetary relief under the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA). This action is further evidence that the agency likely plans to aggressively enforce its Negative Option Rule. As we’ve discussed, the new rule’s disclosure, consent, and cancellation requirements will take effect May 11.

The lawsuit centers on the Uber One subscription that the company offers for an automatically recurring monthly or annual fee after a discounted or introductory offer. The complaint alleges that consumers were unknowingly enrolled into Uber One because the material autorenewal terms were insufficiently disclosed via small, difficult-to-see text. The FTC asserted that Uber pushed consumers to enroll through various means, such as by offering savings on rides.

According to the complaint, when consumers attempted to cancel, they faced numerous confusing screens. For instance, Uber’s interface did not mention the word “subscription” or similar words, placed the cancellation navigation buttons toward the bottom of the screen, and blended the cancellation mechanism into the background, making it difficult for consumers to submit cancellation requests. When consumers did manage to request cancellation, Uber allegedly inserted multiple retention offers, such as an option to “pause” Uber One or accept an additional discount. Consumers also were required to fill out a survey explaining their reason for canceling.

The FTC also noted other alleged deceptive acts and practices, including:

  • Promising consumers that Uber One would save consumers specific dollar amounts over time, despite many consumers not seeing any savings, and failing to calculate the savings amount in a way that accounted for the subscription fee
  • Failing to properly disclose that consumers were required to cancel 48 hours before their renewal date and making “cancel anytime” claims, despite requiring customers to cancel in advance of the renewal date
  • Charging the consumer up to 48 hours before such date, which led some consumers to be charged for another billing cycle before their renewal date

Companies hoping for a relaxed regulatory environment for negative options and subscription services are likely to be disappointed. With the Negative Option Rule’s impending deadline for full compliance and the potential for a $53,088 fine per violation of that rule, a thorough review of your autorenewal offerings is warranted. Contact the authors or Venable’s Autorenewal Solutions Team (VAST) with any questions. VAST will be addressing the case in detail in a webinar on May 1.

For more insights into advertising law, bookmark our All About Advertising Law blog and subscribe to our monthly newsletter. To learn more about Venable’s Advertising Law services, click here or contact one of the authors. And listen to the Ad Law Tool Kit Show—a podcast from Venable.

Join us as we spotlight select chapters of Venable’s popular Advertising Law Tool Kit, which helps marketing teams navigate their organization’s legal risk. Click here to download the entire Tool Kit.

Telephone and text message marketing is subject to complex litigation risks and regulatory challenges, requiring careful compliance. Federal laws like the Telephone Consumer Protection Act (TCPA) and state-specific laws regulate marketing calls and texts, focusing on the use of autodialers, prerecorded messages, and consent requirements.

The Supreme Court’s 2021 decision narrowed the definition of “autodialer,” yet lawsuits under the TCPA and state laws continue, with states like Maryland and Florida enforcing stricter rules. Consent is critical, especially for robocalls and robotexts, with evolving requirements from the FTC and FCC.

Businesses must comply with do-not-call (DNC) laws, scrubbing numbers against DNC lists, adhering to calling time limits, and ensuring proper disclosures. New state laws also address artificial intelligence and telemarketer registration, adding further complexity.

To learn more about copyright counseling and protection, download the 13th edition of our Advertising Law Tool Kit. For more insights into advertising law, bookmark our All About Advertising Law blog and subscribe to our monthly newsletter. 

The Fifth Circuit on April 17 vacated a $57 million FCC forfeiture against AT&T, ruling the agency violated the company’s Seventh Amendment right to a jury trial under the Supreme Court’s 2024 decision in SEC v. Jarkesy. This decision reinforces that federal agencies imposing fines, forfeitures, and other monetary penalties must afford targets access to an Article III decision maker and a jury trial in order to perfect the penalty.

In 2024, the FCC under then Chairwoman Jessica Rosenworcel imposed the forfeiture for AT&T’s failure to protect the customer proprietary network information (CPNI) of its mobile customers, in particular for sharing their geolocation data with data aggregators. AT&T challenged the order at the Fifth Circuit, which ruled in its favor because the forfeiture was imposed without a jury trial in a district court. According to the court, targets of such agency monetary punishments must be afforded full adjudications by Article III courts with jury trials: “No one denies the Commission’s authority to enforce laws requiring telecommunications companies like AT&T to protect sensitive customer data. But the Commission must do so consistent with our Constitution’s guarantees of an Article III decisionmaker and a jury trial.”

In response to the forfeiture order, AT&T could have paid the fine and appealed, or not paid the fine and waited for the Justice Department to file a collection action in district court. But because neither option would provide AT&T with an unrestricted jury trial, the court held the penalty was unconstitutional under the Seventh Amendment’s guarantee of a jury trial: “If AT&T wants an Article III court to review the forfeiture order’s legality, it has to give up a jury trial. If it wants a jury trial, it has to defy a multi-million-dollar penalty, wait for DOJ to sue, and, even then, relinquish its ability to challenge the order’s legality. Either way, AT&T’s Seventh Amendment rights have been denied.”

The decision has two immediate effects. First, at the FCC, it reduces the risk of enforcement actions, most directly by reducing the likelihood the agency will impose FCC fines and forfeitures against parties found in violation of FCC rules. This is already being seen, as both FCC Chairman Brendan Carr and Republican Commissioner Nathan Simington have demonstrated reluctance to use the Enforcement Bureau to take enforcement actions that could result in the imposition of forfeitures. More broadly, the decision will further bolster arguments that SEC v. Jarkesy has wide application to all agency monetary punishments imposed without a jury trial, not just those imposed by the SEC or the FCC. 

With tariffs creating an atmosphere where “imported” may soon come to mean “expensive,” American businesses might be tempted to use their advertising and packaging to emphasize the American origin of their product, no matter how little of the product originates in the USA. But, considering the regulations in place and the recent attention to challenges for false advertising, it’s a good time to review the rules for making Made in the USA claims. A recent jury verdict shows the potential consequences a company may suffer for not following the rules.

Earlier this month, a California jury found a popular tea company, R. C. Bigelow, liable for damages of $2.36 million in a class action lawsuit challenging the company’s Made in the USA claim. The plaintiffs relied on the standard set forth in the Federal Trade Commission’s (FTC) Made in USA labeling rule to show that Bigelow had violated the California Consumers Legal Remedies Act (CLRA), which makes it unlawful to misrepresent the “source, sponsorship, approval, or certification of goods or services.”

Continue Reading Tariffs May Encourage Made in the USA Claims, but You Need to Be Careful

On April 4, the California Department of Resources Recycling and Recovery (CalRecycle) published its final material characterization study report, starting the clock for compliance with Senate Bill No. 343 (SB 343), also known as the “Truth in Recycling” law. Under the law, marketers have 18 months from the date the study findings are published to comply with the requirements.

In 2021, California enacted SB 343, which prohibits the use of chasing arrows and any implied “recyclable” claims on products and packaging unless certain criteria are met. Specifically, SB 343 limits when a company can make a recyclable claim for a product or packaging to situations where:

Continue Reading Compliance Countdown for California’s “Truth in Recycling” Law Begins

The Trump administration transformed global trade policies by implementing a series of sweeping tariffs. Advertisers should ask the following questions.

1. How can I comply with pricing and transparency laws when my costs increase?

    Tariffs are typically calculated as a percentage of a product’s value, paid by importers, and collected by U.S. Customs and Border Protection (CBP). Although Trump now imposes a 10% across the board tariff on most countries, China’s total tariff rates can now exceed 145%. Because tariffs often increase the landed cost of imported products, companies might need to raise prices.

    When incorporating the tariffs into pricing, companies should monitor states’ tariffs announcements and state price gouging laws. (COVID-19 price increases resulted in aggressive enforcement.) Companies should follow “drip pricing” laws requiring the upfront advertised price to reflect all fees (including tariffs and surcharges). Companies should brace for class actions under California’s “Honest Pricing Law,” and challenges to “junk” fees.

    Continue Reading Eight Questions Advertisers Should Be Asking About Tariffs

    On April 7, the Federal Communications Commission (FCC) granted a limited waiver delaying by an additional year the effective date of certain parts of the new Telephone Consumer Protection Act (TCPA) rule. Specifically, the waiver delays the effective date for the requirement that a caller treat a single reasonable revocation as revocation from all future robocalls from that party on unrelated matters, and to accept that single revocation as applying to all its business units and entities, which the agency treats as the same “party.”

    The FCC’s announcement indicated that it applies only to the scope of revocation issues. The bad news for businesses sending texts and making calls? Businesses must still prepare to comply with the rest of the robocall/robotext consent requirements by April 11, 2025. The good news is that companies now have an additional year to implement systems that communicate revocations across different business units within the same company.

    Continue Reading FCC Approves Narrow Delay of New TCPA Revocation Rule

    Venable’s Advertising and Marketing Group hosted its 11th Advertising Law Symposium at our offices in Washington, DC on March 20. The symposium brought together both business and legal professionals, including in-house counsel and marketing executives, to connect on trends, opportunities, and challenges in the industry. The sessions covered a breadth of interesting topics on the latest and greatest in advertising law.

    If you couldn’t make it, here are some themes that ran through some of the day’s engaging conversations:

    Continue Reading Key Takeaways from Venable’s 11th Annual Advertising Law Symposium

    Join us as we spotlight select chapters of Venable’s popular Advertising Law Tool Kit, which helps marketing teams navigate their organization’s legal risk. Click here to download the entire Tool Kit.

    The Federal Trade Commission, state attorneys general, and class action plaintiffs continue to scrutinize negative option and continuity offers, including automatic renewals, free-to-pay conversions, and continuity programs.

    The FTC’s updated Negative Option Rule mandates clear disclosures, unambiguous affirmative consent, and simple cancellation mechanisms. Marketers must disclose material terms such as price, frequency, and cancellation details prominently and understandably, including on mobile devices. Consumers should give informed consent and receive post-transaction confirmations and renewal reminders. Companies must honor cancellation and refund policies and address complaints effectively.

    A web-based cancellation option is crucial for online enrollments. Avoiding liability requires compliance with disclosure and consent rules, ensuring easy cancellations, and promptly addressing consumer concerns and complaints.

    To learn more about copyright counseling and protection, download the 13th edition of our Advertising Law Tool Kit. For more insights into advertising law, bookmark our All About Advertising Law blog and subscribe to our monthly newsletter. 

    In one of the first settlements since the new administration took office, the Federal Trade Commission (FTC) announced a $17 million monetary judgment with Cleo AI to resolve allegations that Cleo violated Section 5 of the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA). Cleo operated a personal finance mobile app that purportedly allowed consumers to take out “instant” or same-day cash advances. The vote to authorize the settlement was 2-0.

    According to the complaint, Cleo advertised that consumers could access same-day or instant cash advances in the hundreds of dollars. The FTC alleged that when consumers attempted to use Cleo’s services, they were required to enroll in an automatically renewing subscription service where they were charged a subscription cost of $5.99 or $14.99 monthly. Only after the consumers entered in their payment information and enrolled in the subscription service did Cleo disclose to consumers the cash advance they were eligible for.

    Continue Reading Cleo AI Settles with FTC for $17 Million for Alleged Misleading Practices and Autorenewal Violations