ESA Applauds Court Decision to Vacate FTC Rule on Negative Option Marketing

July 15, 2025
The Electronic Security Association (ESA) welcomed an Eighth Circuit Court ruling that overturned the FTC’s Negative Option Rule, citing the potential harm it posed to security and life safety services.

The Electronic Security Association (ESA) is applauding a major decision by the Eighth Circuit Court of Appeals, which struck down the Federal Trade Commission’s Negative Option Rule. The court found that the FTC failed to follow the required procedures, including conducting a proper economic impact analysis.

“Negative Options,” according to the FTC, were defined as arrangements “under which the consumer’s silence or failure to take affirmative action to reject a good or service or to cancel the agreement is interpreted by the negative option seller as acceptance or continuing acceptance of the offer.” Such a broad definition had the potential to affect businesses across nearly every consumer-facing industry. The FTC estimated, in its comments within the rule, that over 106,000 businesses were utilizing negative options at the time.

ESA, alongside the U.S. Chamber of Commerce and other petitioners, challenged the rule last fall, warning it posed serious risks to the electronic security and life safety industry. The rule would have applied broad cancellation requirements across all industries, ignoring the essential and continuous nature of security services.

ESA emphasized that security systems are essential, continuous services that safeguard people and property every day. The organization warned that accidental cancellations — such as those caused by missed notices or technical issues — could have left families, businesses and communities vulnerable.

“This ruling is a major win for our industry and the millions of people we protect every day,” stated Taylor Criddle, vice president of advocacy and public affairs for ESA. “The FTC’s rule would have imposed a one-size-fits-all mandate that simply doesn’t work for security and life safety services. We’re proud to have stood up for our members and ensured that critical protections remain uninterrupted.”

ESA’s legal challenge was part of a larger coalition effort involving several industry groups. The case was consolidated in the Eighth Circuit after a judicial panel randomly selected the venue. The panel emphasized the FTC’s failure to conduct the required preliminary analysis, noting the rule’s potential to impact the national economy by more than $100 million annually.

“This was about protecting the integrity of our industry and the people who rely on us every day. We knew the risks this rule posed, and we fought hard to make sure our voice was heard,” stated Melissa Brinkman, ESA Board Member and CEO of Custom Alarm. “This outcome is a direct result of standing together and refusing to accept a regulation that would have jeopardized public safety.”

With the rule now vacated, ESA said its members can continue delivering uninterrupted protection to the public without facing regulatory burdens that do not reflect the realities of their work.

About the Author

Rodney Bosch | Editor-in-Chief/SecurityInfoWatch.com

Rodney Bosch is the Editor-in-Chief of SecurityInfoWatch.com. He has covered the security industry since 2006 for multiple major security publications. Reach him at [email protected].