The Restore Online Shoppers’ Confidence Act, or ROSCA, restricts the use of “negative option features”–defined as “an offer or agreement to sell or provide any goods or services, a provision under which the customer’s silence or failure to take an affirmative action to reject goods or services or to cancel the agreement is interpreted by the seller as acceptance of the offer”– in online transactions. In 2023, the Federal Trade Commission brought suit against Amazon arguing, among other things, that Amazon Prime is sold through a negative option feature, and that its use did not comply with the statutory disclosure, timing, consent, and cancellation requirements.
In a decision earlier this week, a federal district court granted in part and denied in part the FTC’s motion for partial summary judgment, and denied Amazon’s cross-motions, holding that the “enrollment flow” did constitute a negative option feature subject to ROSCA, and that the disclosures were inadequate–finding fact disputes as to other aspects of ROSCA compliance.
