The Restore Online Shoppers’ Confidence Act: New Obligations for Merchants

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On December 29, 2010, President Obama signed the Restore Online Shoppers’ Confidence Act (ROSCA) into law. The law has received surprisingly little media attention, but it deserves a close look by any company doing business online. It targets commonly used promotional practices, including the use of negative option features, which have been enforcement priorities for the Federal Trade Commission (FTC) and state attorneys general in recent years.

In the past, the FTC has targeted allegedly deceptive negative option features pursuant to its authority under Section 5 of the FTC Act. ROSCA will make it easier for it to bring cases and, notably, gives it civil penalty authority that it does not have under Section 5: specifically, the law authorizes the FTC to obtain penalties of up to $16,000 per violation.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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