On April 21, 2025, the FTC filed a complaint against Uber in what is one of the first enforcement actions undertaken in the consumer protection space under the new Trump-Vance FTC headed by Chair Andrew Ferguson.
The complaint relates to Uber’s subscription service, Uber One, and alleges that Uber charged consumers without their consent, failed to provide the savings promised in its advertising, and made it difficult for consumers to cancel the service. The FTC brought this case under the Restore Online Shoppers’ Confidence Act (ROSCA). ROSCA requires, in part, that sellers of goods or services featuring a negative option feature (such as automatic renewals, continuity plans, or free-to-pay conversions) on the internet (1) provide a clear disclosure of all material terms; (2) obtain the consumer’s consent before charging the consumer; and (3) provide simple mechanisms for the consumer to cancel recurring charges. Violations of ROSCA are subject to civil penalties of up to $53,088 per violation. These requirements are similar to those of the FTC’s new Click-to-Cancel Rule, but that rule will apply to all subscriptions offered through all sales channels, not just online.
FTC’s Allegations
In its complaint, the FTC makes numerous allegations that Uber’s conduct constituted deceptive billing and cancellation practices in violation of the FTC Act and ROSCA. The allegations include:
- Customers were wrongly and deceptively promised savings of $25 per month with Uber One that were not true and did not account for subscription costs.
- Consumers were signed up for Uber One subscriptions without their consent.
- The company charged consumers for Uber One before their billing date, and on some occasions before the end of the free trial offered by Uber.
- Uber used a lengthy cancellation process that could span as many as 23 screens and require up to 32 actions to effect cancellation.
Upcoming Click-to-Cancel Rule
Although this complaint relies only on ROSCA to support the monetary liability it seeks, it serves as a reminder that the FTC’s Click-to-Cancel Rule goes into effect on May 14, 2025. To comply with this rule, entities offering products or services with a negative option feature must:
- Disclose all material terms to the consumer before collecting billing information, including how a consumer will be charged, any deadlines to avoid being charged, the amount and frequency of any charges, and how a consumer can cancel.
- Obtain the consumer’s unambiguously affirmative consent to the negative option feature of the transaction, and maintain verification of this consent for at least three years.
- Provide a simple mechanism for a consumer to cancel the negative option feature and any recurring charges (or charge increases) associated with the transaction. This simple mechanism must be at least as easy to use as the mechanism used to enroll in the negative option feature and cannot require an in-person cancellation.
Although the Click-to-Cancel Rule is currently being challenged in the Fifth Circuit Court of Appeals, the FTC continues to defend the rule (despite Ferguson and Commissioner Melissa Holyoak voting no on the rule). On March 17, 2025, the FTC filed a brief in support of the rule that disputed the plaintiffs’ contention that the FTC is barred from adopting regulations that affect multiple industries and sectors of the economy and contended that the rule was properly promulgated and is carefully tailored to address specifically defined conduct. Similar to ROSCA, violations of the new rule will be subject to civil penalties of up to $53,088 per violation.
Statutory Authority
The Uber complaint also serves as a reminder that even if the Click-to-Cancel Rule is ultimately struck down, at least for online sales, the FTC maintains authority to pursue what it views as defective cancellation policies through its statutory authority under ROSCA, which we have previously covered here.
Although the complaint allegations closely track the requirements of the FTC’s Click-to-Cancel Rule, the Uber complaint demonstrates that this FTC can and will seek penalties against online sellers of goods and services with negative option features without actually relying on the new rule. We will have to wait and see whether the Trump-Vance FTC will continue to rely only on statutory authority for monetary penalties instead of using the rule-based authority that had become a hallmark of its Biden Administration predecessors.
Key Takeaways
Companies that offer goods and services with automatic renewal features should review the claims made about not only the charges to be incurred but also the nature of the products and services being offered themselves to ensure all such statements are accurate and not deceptive or misleading. Additionally, companies should evaluate their cancellation processes and ensure they comply with both ROSCA and the new Click-to-Cancel Rule. Companies that make canceling recurring payments difficult for consumers risk finding themselves in the enforcement spotlight of the FTC, state attorneys general, and other regulators.
If you have any questions, or would like additional information, please contact one of the attorneys on our Consumer Protection/FTC team.
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