USE CASE · U.S. SUBSCRIPTION LAW
Subscription and Auto-Renewal Compliance in the United States
Automatically renewed contracts, free trials, and recurring payments are subject to specific requirements in the United States. For online offerings, federal laws 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 products delivered on a regular basis. Our focus is on the offer, checkout, consent, renewal communications, and the actual cancellation process.
The Case at a Glance
Background
A company offers U.S. customers a subscription, free trial, ongoing service, or other recurring payments.
Objective
Structure disclosures, consent, renewal, and termination in a way that ensures compliance with federal and relevant state law requirements.
Support
German-speaking representatives review the subscription journey and coordinate the necessary legal analysis with the U.S. team.
Your Situation
For subscription models, it is not enough to simply mention automatic renewal somewhere in the terms and conditions. For online “negative option” offers that have been identified, ROSCA requires, among other things, clear disclosure of material terms, explicit informed consent, and a simple mechanism for stopping recurring charges.
In addition, several states have their own rules. For certain contracts, California requires, among other things, clear disclosures, affirmative consent, retention of proof of consent, and specific termination and notification mechanisms. These requirements must be implemented in the actual product and billing workflow.
Our Support
We review the entire subscription journey, from the landing page and checkout through billing and renewal to cancellation. As part of this process, we first determine 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 proposed changes to the existing Negative Option Rule. Regardless, ROSCA, Section 5 of the FTC Act, and applicable state laws remain relevant.
Review the U.S. subscription model
Please describe the product, sign-up process, billing, and cancellation procedure. We will determine which requirements are relevant for the specific subscription model and the U.S. 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 disclose the price, term, and automatic renewal before the contract is concluded.
Before signing a contract, the customer should be able to determine what costs will be incurred, how often billing occurs, how long the term lasts, and whether the offer renews automatically or continues until canceled.
We review the placement and content of the disclosures, as well as how they interact with the general subscription terms.
Checkout and Consent
Record and document explicit consent in a reliable manner.
ROSCA requires express informed consent prior to charging in the case of online negative option models that fall under its scope. State laws may impose additional requirements regarding the form and documentation of consent.
We review checkboxes, buttons, text placement, and consent documentation 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 regarding this.
We determine which reminders and notices are needed and how they can be integrated into the existing billing and CRM processes.
Cancellation Process
Make the termination process easy to implement, both technically and legally.
Termination rights must be effective in practice. ROSCA requires a simple mechanism to stop recurring charges; individual state laws further specify the permissible termination procedures.
We review online cancellation, account settings, email and phone channels, and whether retention measures unduly hinder the cancellation process.
Your Contacts
Dr. Raphael Tautz and Matthias Schuhmacher coordinate German-language support. For state consumer law and other specialized issues, the appropriate members of the U.S. 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 must be clearly disclosed, explicit informed consent must be obtained, and a simple mechanism must be provided to stop recurring charges.
The comprehensive 2024 rule was struck down by the courts in 2025. In 2026, the FTC amended the regulations in accordance with the court’s decision and initiated a new process to potentially amend the existing Negative Option Rule. ROSCA and state laws remain in effect regardless.
Having a place of business outside California does not automatically exclude the law from applying. Anyone making relevant offers to consumers in California should include California’s rules in their compliance review.
Yes, especially when a free or discounted offer automatically converts into a paid subscription unless actively canceled. In such cases, the price, consent, and, if applicable, notifications must be reviewed.
Not necessarily. Platforms provide technical functions, but they do not determine, for every business model, which federal and state law requirements apply in a specific workflow.
Additional Information
US Online Store Legal Review
Jointly review the store, checkout, and other e-commerce compliance issues.
U.S. Terms and Conditions
Align the Subscription Terms with the General Terms and Conditions of Sale.
Software
U.S. Legal Issues for SaaS and Software Companies.
Primary Sources / Legal Bases
Selection of primary and original sources particularly relevant to this use case:
- Restore Online Shoppers’ Confidence Act – 15 U.S.C. § 8403 – Federal law governing negative option marketing on the Internet.
- Federal Trade Commission Act, 15 U.S.C. § 45 – Federal law prohibiting 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 – California Automatic Renewal Law, including the amendments applicable as of July 1, 2025, to newly entered into, amended, or renewed contracts.
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