The National Federation of Independent Business (NFIB) has won a legal battle against the Federal Trade Commission (FTC) regarding the Negative Option Rule. The United States Court of Appeals for the Eighth Circuit ruled in favor of small businesses, vacating the rule that targeted automatic renewals of subscriptions or memberships.
Beth Milito, Vice President and Executive Director of NFIB’s Small Business Legal Center, said, "The FTC went far beyond their authority in enacting this rule." She added that NFIB is satisfied with the court's recognition of procedural failures during the rulemaking process, which prevented further regulatory burdens on small businesses.
The NFIB's petition claimed that the FTC's final rule aimed to regulate consumer contracts across all sectors, imposed heavy regulatory obligations on small businesses, and violated the Administrative Procedure Act. The NFIB Small Business Legal Center continues to defend small business owners' rights in courts nationwide and is involved in over 40 cases at various judicial levels.
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