USE CASE · US SUBSCRIPTION LAW
Subscription and Auto-Renewal Compliance in the USA
Automatically renewed contracts, free trials and recurring payments are subject to specific requirements in the USA. For online services, federal legislation such as the Restore Online Shoppers’ Confidence Act (ROSCA) and additional automatic renewal laws in individual states may apply.
We review subscription models for SaaS, apps, memberships, digital content and regularly delivered products. Our focus is on the offer, checkout, consent, renewal communications and the actual cancellation process.
The case at a glance
Background
A company offers US customers a subscription, free trial, ongoing service or other recurring payments.
Objective
Ensure that disclosures, consent, renewal and termination are structured in such a way that federal and relevant state law requirements are aligned.
Support
German-speaking contacts review the subscription journey and coordinate the necessary legal analysis with the US team.
Your situation
In the case of subscription models, it is not sufficient simply to mention automatic renewal somewhere in the terms and conditions. For online ‘negative option’ offers that have been identified, ROSCA requires, amongst other things, clear disclosure of key terms, explicit informed consent and a simple mechanism for stopping recurring charges.
In addition, several US states have their own rules. For certain contracts, California requires, amongst other things, clear disclosures, affirmative consent, the retention of proof of consent, and specific termination and notification mechanisms. These requirements must be implemented within the actual product and billing workflow.
Our support
We review the entire subscription journey, from the landing page and checkout through to billing, renewal and cancellation. The first step is to identify which federal and state laws apply to the specific business model and customer base.
The comprehensive FTC ‘click-to-cancel’ rule, adopted in 2024, was struck down by the courts and removed from the regulations in 2026; the FTC is currently reviewing amendments to the existing Negative Option Rule once again. Regardless of this, ROSCA, Section 5 of the FTC Act and applicable state laws remain relevant.
Review the US subscription model
Please describe the product, the sign-up process, billing and the cancellation procedure. We will clarify which requirements are relevant for the specific subscription model and the US states in question.
Review the subscription journey from sign-up to cancellation
The legal review follows the actual user flow. Four areas are particularly relevant.
Disclosures and Subscription Terms
Clearly set out the price, contract term and automatic renewal before the contract is concluded.
Before signing up, the customer should be able to see what costs will be incurred, how often they will be billed, how long the contract term is, and whether the offer renews automatically or continues until cancelled.
We review the placement and content of the disclosures, as well as how they relate to the general subscription terms.
Checkout and Consent
Record and document explicit consent in a reliable manner.
ROSCA requires express informed consent prior to debiting in the case of online negative option models covered by the legislation. State laws may impose additional requirements regarding the form and evidence of consent.
We check the tick boxes, buttons, proximity to text and documentation of consent in the actual checkout process.
Renewal Notices, Trials and Price Changes
Adapt customer communications to the term and state law.
Depending on the state, notifications may be required prior to certain renewals, following extended free trials, or in the event of price changes. California has detailed guidelines on this matter.
We determine which reminders and notifications are required and how they can be integrated into the existing billing and CRM processes.
Cancellation Process
Make it easy to implement termination from both a technical and legal perspective.
Termination rights must be effective in practice. ROSCA requires a simple mechanism to stop recurring debits; individual state laws also set out the permissible procedure for termination in more detail.
We are examining online cancellation procedures, account settings, email and telephone channels, and whether retention measures are making it unduly difficult to cancel a subscription.
Your points of contact
Dr Raphael Tautz and Matthias Schuhmacher coordinate support in German. For matters relating to state consumer law and other specialist issues, the relevant members of the US team are brought in.
Partner · STEM Practice Group
Your contact in Munich
Partner · STEM Practice Group
Your contact in Munich
Frequently Asked Questions
Essentially, key terms and conditions must be clearly disclosed, explicit informed consent must be obtained, and a simple mechanism must be provided to stop recurring charges.
The comprehensive 2024 regulation was struck down by the courts in 2025. In 2026, the FTC amended the regulations in line with the court’s ruling and initiated a new process to potentially amend the existing Negative Option Rule. ROSCA and state laws remain in force regardless of this.
Having a place of business outside California does not automatically exclude the applicability of the rules. Anyone directing relevant offers to consumers in California should include the Californian rules in their compliance assessment.
Yes, particularly when a free or discounted offer automatically converts into a paid subscription unless actively cancelled. The price, consent and, where applicable, notifications must then be reviewed.
Not necessarily. Platforms provide technical functions, but do not determine, for every business model, which federal and state law requirements apply in a specific workflow.
Further information
US Online Shop Legal Check
Jointly review the shop, checkout and other e-commerce compliance aspects.
US Terms and Conditions
Align the subscription terms with the general terms and conditions of sale.
Software
US legal issues for SaaS and software companies.
Primary sources / Legal basis
Selection of primary and original sources particularly relevant to this use case:
- Restore Online Shoppers’ Confidence Act – 15 U.S.C. § 8403 – Federal legislation on negative option marketing on the internet.
- Federal Trade Commission Act, 15 U.S.C. § 45 – Federal legislation against unfair or deceptive acts or practices.
- FTC Negative Option Rule / ongoing rulemaking – Official FTC page on the current status of the Negative Option Rule and the rulemaking process initiated in 2026.
- California Business and Professions Code §§ 17600–17606 – the California Automatic Renewal Law, including the amendments applicable from 1 July 2025 to newly concluded, amended or renewed contracts.
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