USA - Nationwide: An Advertising: Transactional & Regulatory Overview
Evolving Multi-Jurisdictional Compliance and Enforcement for Advertisers
While enforcement of advertising-related compliance requirements at the federal level is not the same as in years past, advertisers must continue to comply with applicable regulatory requirements enforced by a broad array of agencies. Notably, the Federal Trade Commission (FTC) has continued to promulgate and enforce regulations affecting advertisers, particularly regarding subscription and continuity programs. At the same time, state and local regulators are increasingly active, and the self-regulatory National Advertising Division has taken steps to adapt to this new paradigm in consumer protection enforcement.
The FTC Structure and Enforcement Authority Limitations
As the chief federal law enforcement agency for advertising and consumer protection, the FTC is meant to be headed by five Commissioners. FTC Commissioners are nominated by the President and confirmed by the Senate, with no more than three of the same political party. However, as a result of President Trump’s firing of the two Democratic Commissioners and the retirement of the past Chair, the FTC continues to be led by only two Commissioners, both of whom are Republican. Further, President Trump has failed to nominate any Democratic Commissioners. The current structure has led to limited public debate at the FTC on enforcement and proposed regulatory action.
In addition to the current leadership limitations, the FTC’s ability to administratively adjudicate deceptive advertising claims was severely scaled back by the Fifth Circuit in Intuit v FTC. In its 20 March 2026, decision, the Court of Appeals struck down an administrative law judge’s decision against Intuit for deceptive advertising of its free tax service, holding that such claims must be exclusively brought in an Article III federal court, and not before an administrative law judge. The impact of this decision is significant as it likely limits the FTC from pursuing not just deceptive advertising but also unfair practices cases in its own administrative court, with such claims restricted to litigation in federal court.
Law Enforcement Agenda
AI enforcement
Under this new structure, the Republican-only FTC has shifted the agency’s approach to consumer protection compliance. Notably, during the current administration, the FTC has undone a prior FTC settlement involving AI-generated reviews. The FTC’s 2024 final order approval against the AI-assisted review service Rytr LLC resulted in the company being banned from providing any AI-enabled service that generates consumer reviews or testimonials, as the service had been used to generate fake reviews. In December 2025, the two Commissioners voted to set aside the settlement because they found that the order “unduly burdens innovation in the nascent AI industry.” This rare reversal of a prior, recently entered settlement signals that the FTC will take a less aggressive approach to enforcement against generative AI companies.
Subscription and continuity program enforcement
While the FTC may not be as active across a wide array of consumer protection matters, the Commission has been exceptionally active in challenging continuity programs that it views as difficult to cancel, as well as advertisers’ use of dark patterns to manipulate consumer behavior. The most prominent settlement in this regard was the FTC’s USD2.5 billion settlement with Amazon, with respect to its difficult-to-cancel Prime subscription, so cumbersome that Amazon insiders had labelled it “The Iliad” as an homage to Homer’s famous epic poem.
Similarly, the FTC announced a USD60 million settlement with Instacart over claims that the grocery delivery service falsely advertised free delivery and failed to sufficiently disclose subscription terms. A similar order was entered against Match Group, Inc over allegations related to deceptive subscription practices on its dating platforms, including Tinder, Match.com and OkCupid. Further, the FTC, joined by 21 states, has challenged Uber One over its subscription enrollment and cancellation practices, reflecting joint enforcement on subscription programs.
The FTC continues to take action against advertisers related to subscriptions and automatic renewals, despite its prior attempt to promulgate new regulations as part of its “Negative Option Rule” being struck down by the Eighth Circuit for failure to comply with proper rulemaking requirements. In light of the Eighth Circuit decision, the FTC has now reissued the “Click to Cancel” rulemaking (requiring online cancellation where a consumer enrolled online). Although this rulemaking process will likely take some time, the above enforcement actions make clear that the Commission will continue to challenge continuity programs’ enrollment and cancellation processes that it believes are unfair to consumers. As a result, advertisers should be vigilant about making sure that their enrollment processes are transparent, and that their cancellation processes are easy to effectuate upon signing up.
Transparent/drip pricing
The FTC has begun enforcing its recently enacted transparent pricing regulations, the Rule on Unfair or Deceptive Fees. Those regulations, which apply to live events and short-term accommodation (ie, hotels/Airbnb), require businesses to disclose the total price (including all service fees, resort fees) upfront as part of the advertised price. To that end, the FTC recently announced a USD10 million settlement with StubHub to resolve allegations that the ticket reseller failed to clearly disclose all mandatory fees upfront.
Other enforcement agencies and avenues
In addition to what is happening at the FTC, advertisers must also consider the potential for actions originating with other enforcement agencies, such as state Attorneys General and District Attorneys. While these governmental actors are not new to advertisers, there is a new “sheriff” in town at the city level.
New York City
New York City Mayor Zohran Mamdani appointed Sam Levine, the former Director of the FTC’s Bureau of Consumer Protection, as Commissioner for the New York City Department of Consumer and Worker Protection (DCWP). While the DCWP has focused on local New York City-related businesses in recent years, Levine’s appointment as the Commissioner has already resulted in the DCWP taking aim at national advertising campaigns and business practices. This is particularly true in the case of negative option/subscription programs. Indeed, the DCWP recently proposed regulations to enact the “click to cancel” rule being proposed at the FTC, which would require marketers to allow consumers to cancel subscriptions using the same method they signed up with and otherwise target “free to pay” conversion enrollments where a “free” subscription automatically converts to a paid one. Because of the borderless nature of e-commerce, the DCWP’s regulations will likely have national implications.
National Advertising Division of the Better Business Bureau
Furthermore, the self-regulatory National Advertising Division (NAD) has now expanded its referral process for advertisers that fail to comply with its recommendations. While NAD has historically referred non-compliant advertisers to the FTC (with whom it had an agreement to give such referrals the highest enforcement priority), NAD has now expanded its referrals to the Consumer Protection Division of the National Association of Attorneys General, thereby likely increasing the odds that state Attorneys General will pursue such non-compliant advertisers. Given the importance of social media platforms and other e-commerce platforms to advertisers, NAD has also worked out enforcement arrangements with Meta and Amazon to have non-compliant advertising taken down.
Conclusion
While consumer protection enforcement on the federal side may not be what advertisers were expecting under the current administration, the fact is that enforcement continues in selected areas on the federal side. Moreover, state, local and self-regulatory bodies are adapting to the new environment to press forward their consumer protection priorities. As such, advertisers must remain vigilant in their compliance efforts, regardless of who may be the enforcer.