Missouri Press Association
Serving Missouri Newspapers Since 1867
Automatic renewals of subscriptions are a customer service convenience. Not that anyone should care, but I would not survive three months without autopay of my utility bills and credit cards.
However, evergreen subscriptions are under increasing legal scrutiny—both nationally and in Missouri. If your newspaper offers subscriptions (print, digital, bundles, etc.) that renew automatically, it’s something to keep on your radar. The feds call this kind of subscription a “negative option” subscription – any subscription that treats a customers’ inaction as a continuing acceptance of the deal. And it’s a deal that is currently in the crosshairs.
Last month, the Federal Trade Commission announced a settlement with a company, Chegg, that provides educational products to high school and college students that include online subscriptions to study materials and writing coaching. The FTC took the position that Chegg made it too hard for parents and students to cancel the subscription by making customers navigate through several confusing pages to get to the cancellation option. The company agreed to pay $7.5 million to resolve the case.
The case was based on the Restore Online Shopper’s Confidence Act (ROSCA). Highly summarized, the act requires subscriptions to be up front about its terms, and to make it easy to cancel. Earlier this year, the Eighth Circuit Court of Appeals sitting in St. Louis overturned a related FTC rule that would have all but required use of an affirmative check box to authorize auto-renewing and cancellation that was as simple as the sign-up process was. This was known as the “click-to-cancel” rule. The Eight Circuit overturned the rule on a technicality – so it may be back in the future.
In Missouri, a bill was introduced in 2021 targeting auto-renewing subscriptions, but it did not progress very far and has not resurfaced since. Even if a bill doesn’t pass, many states have moved toward requiring clearer disclosures, advance notices before renewal, better cancellation processes, etc. That means that what’s “safe” today might shift. Publishers should be alert. This summer Arkansas passed a law that requires such subscriptions to have explicit consent, clear disclosure and simple cancellation procedures. Illinois also has a comparable law on the books.
Though Missouri does not have a specific law regarding negative option contracts, it does have its Missouri Merchandising Practices Act, which generally forbids deceptive or misleading advertising practices when it comes to the sale of services and goods.
A regulation promulgated by the attorney general, 15 CSR 60-8.060, entitled “Unsolicited Merchandise and Negative Option Plans,” which states: “[i]t is an unfair practice for any seller in connection with the advertisement or sale of merchandise to bill, charge or attempt to collect payment from customers, for any merchandise which the customer has not ordered or solicited.”
The Missouri Supreme Court interpreted this rule to mean that “the act of charging for unsolicited merchandise is an unfair practice” under the Missouri Merchandise Practices Act (MPPA). Chocorowski v. Home Depot USA, 404 S.W.3d 220, 226 (Mo.banc 2013). The act defines “merchandise” to include goods and services, so a newspaper subscription probably fits the bill. In Chocorowski, the Missouri Supreme Court held that Home Depot’s practice of including in a written rental contract an optional damage waiver and a related fee was not a “negative option under the MMPA” because the plaintiff had affirmatively opted for the waiver by initialing a box.
If your newspaper currently uses automatic renewal, it may be a good idea to review it. Does it provide transparency and, clear disclosure of any auto renewing feature? Does it provide an easy cancellation process? Ideally, does it require explicit, separate consent that is documented? If there’s any doubt, it may be worth consulting an attorney specializing in consumer contracts to audit your subscription policies.
As more regulations come into force, either from Jefferson City or Washington, the legal bar is rising. For newspaper publishers, treating subscriptions with clarity and fairness is good legal hygiene.
