The incredible growth of online commerce has resulted in various methods for internet entrepreneurs to offer their products (goods or services) to consumers. One regularly used method is to offer products on a free trial and subscription basis, also referred to as a ‘negative option offer’. There is nothing fundamentally unlawful about negative option offers. However, its use requires a proper communication of its many features to consumers. This article illustrates which type of information must be disclosed to consumers when using negative option offers and where the disclosures must be placed on the website. The article will examine these issues under U.S. law.
In online commerce, negative option features have become an often used method for companies to offer their products. Take Apple for example. Apple offers consumers a free three-month trial membership to Apple Music. If the consumer fails to cancel before the end of the three-month trial period, the membership will convert into a paid monthly membership which will auto-renew every month until cancelled. Apple seemingly interprets the consumer’s failure to cancel the membership before the end of the free trial as consent to convert the free trial membership into a paid membership. Subsequently, Apple seemingly interprets a consumer’s failure to cancel the membership at the end of each month as consent to auto-renew the membership with another month. An offer based on a negative option feature manufactures consent by interpreting the absence of an act by the consumer as an acceptance of the offer. The ‘negative’ element in this term refers to the fact that - if you do not like the offer - you have to exercise a negative act by affirmatively ‘rejecting’ the offer.²
There is nothing unlawful per se about the use of negative option features under U.S. law. However, due to its mechanism, its purpose to implicitly infer consent from a consumer’s silence, U.S. consumer protection statutes impose disclosure obligations on its use. But these statutes do not stipulate in more detail which specific disclosures must be communicated for a lawful use of negative option features. In addition, it is unclear how the disclosures must be communicated to consumers, i.e. where on a website they should be placed.
This article examines under U.S. law (i) which type of information must be communicated to consumers for a lawful use of negative option features in online offers; and (ii) where on the website these disclosures should be placed. This aim will be largely rooted in an analysis of cases brought by the Federal Trade Commission (FTC), the primary consumer protection authority in the United States.

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