New California Requirements for Subscriptions in 2025

The U.S. Federal Trade Commission (FTC) has taken an aggressive approach to crack down on what it views as illegal auto-renewal subscription practices. Last year, the FTC finalized its “click-to-cancel” rule, requiring companies to provide a “simple” mechanism to cancel negative option contracts. The rule has already come under attack in federal court, but so far it remains in effect. The FTC has brought many alleged deceptive negative option marketing cases on a bipartisan basis for years, including under the Restore Online Shoppers’ Confidence Act. However, given that both Chair Ferguson and Commissioner Holyoak voted against the “click-to-cancel” rule (with Commissioner Holyoak issuing a strong dissenting statement), the prospect of new leadership at the FTC has prompted speculation that the agency might pull back from enforcing the broader aspects of the rule. Regardless of what course the FTC takes, businesses should remain vigilant because state and local agencies and plaintiffs’ lawyers, especially those in California, will likely take up the FTC’s cause against subscription products under their own auto-renewal laws.

California in particular has one of the strictest auto-renewal laws in the country. And just recently, California amended its auto-renewal law to include new, strengthened requirements that will apply July 1, 2025. They include:

• Express affirmative consent. Businesses must now obtain customers’ “express affirmative consent” to a subscription’s auto-renewal terms rather than mere “affirmative consent” as previously required. While the law does not define “express affirmative consent,” based on past settlements, prosecutors prefer a separate checkbox or similar mechanism that customers must affirmatively select to accept only the auto-renewal terms and no other terms.
• Retention offers. When customers request to cancel subscriptions online, businesses may offer discounts or other promotions to retain them if a “cancel” button is simultaneously displayed in a prominent and proximate location. The same principle applies to customers who request to cancel by phone; businesses may present them retention offers if they are first told that they may complete the cancellation by stating they want to cancel. If the “cancel” button is clicked (for online requests) or customers state their intent to cancel (for phone requests), businesses must promptly process the cancellation without obstruction or delay.
• Price change. If the price of an existing subscription changes, businesses must provide clear and conspicuous notice of the change seven to 30 days before it takes effect. This notice must also include information on how to cancel.
• Annual reminder. For subscriptions that renew annually, businesses must send an annual reminder to customers disclosing what is being renewed, the frequency and amount of the automatic charges, and how to cancel.

To reduce the risk of a costly enforcement or class action lawsuit, businesses should proactively audit their subscription products’ enrollment and cancellation flows, as well as related notices, for compliance with these amendments and existing requirements under California’s law.

© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.