Insights

On April 21, 2025, the FTC filed an enforcement action against Uber alleging that Uber enrolled consumers in Uber One without proper consent, created substantial barriers to cancellation, and misrepresented the financial benefits of the subscription. The claims include violations of the FTC Act—which prohibits unfair and deceptive acts in commerce—and the Restore Online Shoppers’ Confidence Act (“ROSCA”)—which prohibits charging consumers for goods and services sold on the internet through a negative option (i.e., failing to cancel a subscription, unless the seller clearly discloses all material terms of the transaction before obtaining the consumer’s information and obtains the consumer’s expressed informed consent for the charges and provides simple mechanisms for the consumer to stop the recurring charges).

On April 14, 2025, ClassPass, a web-based company offering subscription services to third-party fitness classes, petitioned for rehearing en banc of the Ninth Circuit’s Chabolla v. ClassPass decision, which held that ClassPass’ users were not bound by the terms of ClassPass’ “sign-in wrap” agreement. The ruling has significant consequences for online companies using sign-in wrap agreements and for online contract formation and enforcement more generally. A sign-in wrap is a type of online agreement in which the agreement is hyperlinked on the website, but the user is not required to access, review, confirm an understanding, or otherwise affirmatively “assent” to be bound. If the Ninth Circuit does not grant ClassPass’ request and issue a new ruling in Chabolla, this case may signal the death knell for sign-in wraps, resulting in significant disruption, friction, and ultimately lower conversion for online companies who will be forced to redesign their sign-up flows to be click-wrap agreements (online agreements that require the user to affirmatively accept a company’s terms of use by clicking an assent box or button). Short of that, this decision increases business risk given that there are now conflicting opinions both within the Ninth Circuit and between the various Circuits.

On April 3, 2025, the United States Department of Justice’ Antitrust Division hosted a forum on “Big-Tech Censorship” in which key Trump Administration Officials announced their desire to reform, or entirely overhaul, Section 230 of the Communications Decency Act. In March 2025, we wrote about the Federal Trade Commission’s (FTC) inquiry into “tech censorship” and its associated request for public comments from those who “may have been harmed by technology platforms that limited their ability to share ideas or affiliations freely and openly.” That RFI remains open, and its deadline is May 21, 2025.

On February 20, 2025, the Federal Trade Commission launched an “inquiry” into “tech censorship” by calling for public comments from those who “may have been harmed by technology platforms that limited their ability to share ideas or affiliations freely and openly.” The deadline for comments is May 21, 2025.

On December 17, 2024, the Federal Trade Commission (“FTC”) and the Illinois Attorney General (“AG”) announced a $140 million settlement with Grubhub to resolve charges involving an array of allegedly unlawful and deceptive business practices. Even though the FTC’s proposed final rule on junk fees (also announced on December 17, 2024) is limited to hotels, live events, and short-term rentals, this settlement demonstrates that the FTC will use its broad enforcement powers to pursue companies imposing junk fees online, and that both federal and state consumer protection regulators will formulate 2025 enforcement priorities with junk fees and click-to-cancel in mind. Indeed, this $140 million settlement, of which Grubhub will pay $25 million based on its demonstrated inability to pay the full amount, is the first of its kind in that it is a joint action by the FTC and state regulators to pursue both junk fees and click-to-cancel violations.

On October 16, 2024, over 18 months after first issuing its proposed rule, the Federal Trade Commission (“FTC”) issued a final rule to make it easier for consumers to cancel their subscriptions, memberships, automatic renewals, and other recurring payment options.  This rule reaches consumers and businesses in all sorts of industries: from gym memberships to e-commerce and delivery app subscriptions, internet services, cable, cell phone, and broadband and streaming services, gift box services, and even spa memberships, the examples abound. The purpose behind the rule is to increase transparency and make it easier for consumers to cancel subscriptions, saving them time and money by ending the “doom loop” some may find themselves in when trying to cancel such a feature.

On Sunday, September 29, 2024, California Gov. Gavin Newsom vetoed SB 1047, a bill to enact the Safe and Secure Innovation for Frontier Artificial Intelligence Models Act. Although the bill passed the California Assembly and Senate, it generated significant controversy and debate within the tech community. The Center for AI Safety, Elon Musk, the L.A. Times editorial board, and San Francisco-based AI startup Anthropic all supported the bill; while Meta, OpenAI, and House Speaker Nancy Pelosi opposed it as hindering innovation.

After conducting an investigation targeted at nine popular social media and video streaming companies, the Federal Trade Commission (FTC or Commission) released a Staff Report examining their data practices, including those relating to minors.  The FTC based its report on responses to questions it compelled under Section 6(b) (which enables the Commission to require an entity to file reports or answers in writing to specific questions) from Amazon.com, Inc. (which owns the gaming platform Twitch), Facebook, Inc. (now Meta Platforms, Inc.), YouTube LLC, Twitter, Inc. (now X Corp.), Snap Inc., ByteDance Ltd. (which owns the video-sharing platform TikTok), Discord Inc., Reddit, Inc., and WhatsApp Inc.

California Governor Gavin Newsom announced his plans to sign Senate Bill 1037, a bill designed in response to the “statewide housing shortage crisis” that will give Attorney General Rob Bonta new civil penalty authority to hold municipalities accountable from the moment they purportedly first violate the state’s housing laws. This marks a significant change in the law.

As we’ve previously reported, FTC practitioners and businesses alike have been anxiously awaiting details about the rule that will prohibit purportedly deceptive practices in connection with reviews and testimonials. Our readers likely recall the FTC’s advance notice of proposed rulemaking from November 2022, the notice of proposed rulemaking from June 2023, and the informal hearing on the proposed rule which occurred in February 2024. The wait is finally over: just yesterday, August 14, 2024, the agency announced the “Rule on the Use of Consumer Reviews and Testimonials” (the “Rule”). The final Rule, which the Commissioners unanimously approved, is a formal step to address alleged ongoing non-compliance with Section 5 of the FTC Act and the agency’s Guides Concerning the Use of Endorsements and Testimonials in Advertising (the “Endorsement Guides”), particularly in the consumer review space.

Call it the summer of junk fees and drip pricing. In July, California’s new drip pricing law went into effect and in August the federal government announced further proposed rules into junk fees and subscription services. Regulators say these proposed price transparency laws and regulations are consumer protection tools that will save consumers money, help them avoid hidden fees and enable them to cancel recurring charges and subscriptions.