Regulatory and Litigation Trends Shaping Consumer Products and Retail Risk in 2026

The consumer products and retail industry experienced no shortage of regulatory, litigation, and policy developments in 2025. One clear takeaway emerged across agencies and issue areas: while priorities continue to evolve, enforcement and litigation activity are not slowing. Instead, risk is increasingly shaped by state-level initiatives, operational design choices, and marketing and labeling claims that can quickly attract regulatory scrutiny or private litigation.

As companies look ahead to 2026, several themes stand out as likely to define the risk landscape for manufacturers, importers, retailers, and suppliers.

Consumer protection enforcement is increasingly focused on user experience

Subscription and auto-renewal programs remain a top enforcement and litigation priority. Even where formal rulemaking has encountered setbacks, regulators and plaintiffs continue to focus on how subscription programs function in practice — particularly whether consumers clearly understand enrollment terms and how easy it is to cancel.

These cases frequently turn on design choices rather than disclosures alone. The number of steps required to cancel, the use of retention screens, and messaging that could be viewed as confusing or coercive are all areas of focus. Internal communications and metrics may also come under scrutiny, particularly where they reflect awareness of consumer friction or unusually high cancellation rates. As a result, subscription compliance is increasingly both a legal and user-experience issue. For example, the U.S. Federal Trade Commission (FTC), 21 states, and the District of Columbia filed a lawsuit against Uber alleging that consumers enrolled in Uber’s UberOne subscription program faced a complicated cancellation process due to design choices, including the following:

• A cancellation flow that required users to navigate multiple screens and actions before seeing an option to cancel
• Interface designs, such as prominent “Keep Uber One” or “Pause Uber One” buttons, paired with allegedly visually obscured cancellation options
• Removal of the “End membership” button within the final 48 hours before renewal

Related enforcement is discussed in our Advisory.

Marketing claims continue to drive scrutiny and litigation

Advertising practices that influence consumer trust remain high on enforcement agendas. For example, many of the complaints filed by the FTC and states regarding allegedly deceptive negative-option programs challenged purportedly unsubstantiated “free” claims.

Endorsements, influencer marketing, and consumer reviews are also areas of sustained focus, particularly where material connections are not clearly disclosed or where review practices create a misleading picture of the consumer experience. For instance, in December 2025, the FTC sent Warning Letters to select companies, highlighting actions such as paying employees to obtain positive reviews from their friends and family or soliciting reviews from people who have not used the product or service, as violating the Trade Regulation Rule on the Use of Consumer Reviews and Testimonials. Both highlight the importance of closely monitoring “free” claims, as well as the incentives marketing teams and agencies offer to encourage online discussion of company products and services.

“Made in USA” claims also remain a significant risk area. Recent enforcement activity underscores that regulators expect accuracy not only from manufacturers but also from retailers and platforms hosting third-party sellers.¹ Retailers, in particular, should be mindful of how claims appear online and of the vetting processes for third-party products offered through their digital marketplaces, as regulatory bodies continue to signal an expectation that retailers help ensure third-party products sold on their platforms comply with the law.

AI claims are under pressure, even as policy frameworks evolve

Artificial intelligence (AI) continues to attract regulatory attention, with a growing emphasis on claims about what AI can do and how it is used. While federal policy discussions may favor a lighter-touch approach in certain respects, such as the FTC’s decision to set aside the Final Order in Rytr in part because it found that the order unduly burdened AI innovation, enforcement continues to focus on deception. This emphasis is especially evident in cases such as Workado and AirAi, where the FTC issued final orders banning marketing that suggested unsubstantiated capabilities or benefits, such as claims of “now with 98% accuracy” and “never fails to deliver consistent performance.”

At the same time, states are advancing their own requirements — such as New York’s Senate Bill 8420A, requiring disclosures when synthetic actors appear in advertisements, and California’s Senate Bill 243, which requires disclosures and content restrictions for certain AI chatbots. For companies integrating AI into products or marketing, the near-term compliance challenge is less about adoption and more about accurate description, substantiation, and transparency.

CPSC enforcement remains aggressive despite leadership uncertainty

Leadership changes and structural uncertainty at the Consumer Product Safety Commission have not translated into reduced enforcement activity. To the contrary, recalls and product safety warnings continued at a record high pace in 2025.

Civil penalties continue to focus on alleged late reporting of potential product safety hazards, with recent penalty settlements sending a reminder that reporting can be triggered and significant penalty exposure can arise even in the absence of reported incidents and injuries. Criminal investigations and enforcement related to reporting obligations also remain an active enforcement area. The risk of such penalties should serve as a reminder for companies to be vigilant when assessing their Section 15 reporting obligations.

Operational compliance considerations should be well underway as the July 8, 2026 effective date for e-filing approaches. Companies importing consumer products subject to mandatory safety standards will be required to submit certificates of compliance electronically at entry — a change that implicates legal, supply chain, and customs functions alike.

State regulation is increasingly shaping national exposure

Across multiple issue areas, state regulation continues to drive risk on a national scale. PFAS regulation illustrates this trend clearly, with varying state legislation restricting PFAS in packaging and in certain products such as clothing, cookware, and cosmetics. Further, state regulations continue to refine definitions, thresholds, and testing methodologies. These requirements can be challenging to operationalize, particularly where trace or incidental levels raise questions about intent, testing reliability, and supply chain controls.

In the food and dietary supplement space, states are advancing restrictions on certain additives, dyes, and sales practices, while also shaping the conversation around ultra-processed foods. In 2025, many states introduced and enacted legislation regulating food dyes and additives, including statewide bans, restrictions on serving certain ingredients in schools, and labeling mandates for products containing certain ingredients. Lawsuits are being filed from both directions, challenging the food industry and recent state laws alike. For example, recent lawsuits claim that ultra-processed foods are harmful and highly addictive, and that food companies are aware of this and have continued to market these products aggressively. At the same time, food industry groups are contesting Texas SB 25’s labeling requirements and West Virginia’s HB 264’s ban on certain food dyes and additives, arguing these laws violate the Constitution.

This bipartisan effort is ongoing and is likely to continue through both legislation and litigation, including through more constitutional challenges to state-level requirements.

Litigation trends emphasize claims over safety

Litigation trends in the consumer products and retail space increasingly emphasize economic-loss theories rather than traditional personal injury claims. Pricing and promotional challenges, “all natural” labeling cases tied to ingredient sourcing or manufacturing methods, and subscription-related claims continue to proliferate.

Emerging areas of litigation are also tracking public and regulatory attention. PFAS-related claims are expanding, and plaintiffs are beginning to test similar theories involving microplastics in food and packaging — particularly where products are marketed using terms like “pure,” “clean,” or “free of.” Ultra-processed food litigation is another area to watch, especially where products are marketed to children or positioned as health-forward.

Looking ahead: identifying and managing friction points

Across these developments, risk often emerges at operational friction points — where compliance, marketing, product design, and supply chain practices do not align seamlessly. As companies plan for 2026, areas worth close attention include:

• Subscription enrollment and cancellation flows
• Marketing and labeling claims, including reviews, endorsements, and origin statements
• Product safety reporting processes and escalation protocols
• State-law obligations affecting chemicals, packaging, and food products
• Exposure to marketing-based class action theories

These issues will continue to evolve, and staying ahead will require coordination across legal, compliance, product, and business teams. If you have questions, please reach out to the authors of this post or any member of Arnold & Porter’s Consumer Protection & Advertising team.

© Arnold & Porter Kaye Scholer LLP 2026 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.