📣 FTC Negative Option Rule Compliance Update - July 2025
We’ve got an important compliance update to share that will help you stay ahead of upcoming US subscription regulations that require clearer consent for recurring subscriptions.
These new regulations will take effect:
✅ California: July 1st (California Automatic Renewal Law)
✅ Rest of US: July 14th (FTC Negative Option Rule)
Both laws require explicit customer consent, clear disclosures, and simple cancellations for auto-renewals, free trials, and subscription services.
In response to this, Paddle is updating our checkout with new compliance features starting July 1st for California customers and July 14th for the rest of the US. (edited)
🤔 What's changing:
New mandatory checkbox added to Paddle checkout for all recurring subscriptions
Customers must explicitly confirm they understand they're signing up for recurring billing
Enhanced transparency around subscription terms at point of purchase
💡 What do you need to do?
There is nothing you need to do. As your Merchant of Record, we've automatically implemented all compliance updates. Your existing subscription management features (cancellation options, transparent pricing) already meet the regulatory requirements.
🎉 Benefits:
Reduced dispute and chargeback risk from unclear billing practices
Enhanced customer trust through transparent subscription experience
Full compliance with industry-leading consumer protection standards
If you have any questions, we’re here to help at sellers@paddle.com
–Hajel Mistry, Product Manager, Tunrie Bisi-Afolabi, Legal Counsel @ Paddle
