On February 12, the FTC issued a final rule revising the Rule Concerning Recurring Subscriptions and Other Negative Option Programs, withdrawing the Combating Auto Retail Scams Trade Regulation Rule (CARS Rule), and removing the Non-Compete Clause Rule from the Code of Federal Regulations following federal court decisions vacating those rules.
With respect to subscription and recurring billing practices, the Commission revised the Negative Option Rule to restore the regulatory text that existed before the November 2024 amendments. The U.S. Court of Appeals for the Eighth Circuit vacated those amendments on procedural grounds under the Federal Trade Commission Act, concluding that the Commission failed to complete a required preliminary regulatory analysis. The final rule reinstates the earlier version of the rule as the operative standard governing prenotification negative option plans. At the same time, the FTC has signaled that further regulatory action is forthcoming: on January 30, 2026, the Commission submitted an Advance Notice of Proposed Rulemaking to the Office of Information and Regulatory Affairs, formally restarting its negative option rulemaking effort. That step indicates that, although the 2024 amendments have been set aside, the Commission intends to revisit subscription and auto-renewal practices through a new rulemaking process.
For motor vehicle dealers, the Commission formally withdrew the CARS Rule following a decision by the U.S. Court of Appeals for the Fifth Circuit vacating the rule based on procedural deficiencies under the FTC Act and the Dodd-Frank Act (previously discussed here). The rule would have imposed detailed pricing, advertising, and add-on consent requirements on dealers.
The Commission also removed the Non-Compete Clause Rule after federal district courts concluded that the FTC lacked authority under the Federal Trade Commission Act to promulgate the rule and that it was unlawful under the Administrative Procedure Act. The Commission subsequently dismissed its pending appeals and acceded to vacatur, resulting in removal of the rule from the CFR.
Putting It Into Practice: Although the regulatory text has reverted, the FTC retains authority under the Federal Trade Commission Act to pursue allegedly unfair methods of competition and unfair or deceptive acts or practices. State regulators likewise remain active in subscription marketing, auto retail practices, and restrictive covenant oversight. Businesses that modified compliance frameworks in anticipation of these rules should recalibrate to the restored baseline while continuing to monitor whether the Commission pursues renewed rulemaking or shifts toward case-by-case enforcement in these areas.