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IAB To FTC: Proposed Auto-Renewal Rules Could Hobble Online Subscription Model

A Look Ahead: What to Expect from a Fully Staffed FTC under President Biden 5

WASHINGTON, DC – Interactive Advertising Bureau (IAB) filed a public comment today in response to a Federal Trade Commission (FTC) Notice of Proposed Rulemaking (NPRM) for online subscription services. Proposed auto-renewal rules could slow service, burden consumers with irrelevant information, and raise prices, explains IAB Executive Vice President for Public Policy Lartease Tiffith in today’s filing.

“These proposed rules are far broader than what the FTC previewed in 2019,” said Tiffith in an accompanying statement. “As a result, businesses and consumers have had barely any input, and the agency is making poorly informed and potentially very costly decisions.”

“We’re calling on the FTC to conduct an economic analysis of the effect on small businesses and the U.S. economy, as required by law, and for a public hearing where IAB could raise more factual and legal problems with the FTC’s approach to regulating online commerce,” he said. “We support punishing bad actors, but conflicting and confusing rules will do more harm than good.”

According to IAB, the FTC is on shaky legal footing, fails to cite widespread problems, mandates impractical disclosures and forms, and overlooks the impact on businesses and consumers. The NPRM violates federal laws and court decisions requiring more evidence, narrow scope, flexibility for businesses, and reasonable penalties.

“The FTC’s plans to regulate what it calls ‘negative options,’ or automatic renewals, could dissuade customers from purchasing any products or services at all,” said Tiffith. “There are cases of abuse, but millions of Americans enjoy free trials, easy enrollments, and auto-renewals, saving time and money. These are standard features of our speedy, data-driven internet economy and a net benefit.”

“Unfortunately, this latest rulemaking is another example of the agency deviating from established norms, breaking rules and procedures that govern the agency itself. We hope to work together to improve consumer protection and trust.”

About IAB
The Interactive Advertising Bureau empowers the media and marketing industries to thrive in the digital economy. Its membership comprises more than 700 leading media companies, brands, agencies, and the technology firms responsible for selling, delivering, and optimizing digital ad marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, IAB develops technical standards and solutions. IAB is committed to professional development and elevating the knowledge, skills, expertise, and diversity of the workforce across the industry. Through the work of its public policy office in Washington, D.C., the trade association advocates for its members and promotes the value of the interactive advertising industry to legislators and policymakers. Founded in 1996, IAB is headquartered in New York City.

IAB Media Contacts
Kate Tumino / Brittany Tibaldi
212-896-1252 / 347-487-6794
[email protected]/ [email protected]