Appeals court blocks FTC's "click-to-cancel" rule just days before rollout

Skye Jacobs

Posts: 732   +15
Staff
What just happened? A federal appeals court has blocked a major consumer protection measure that was set to change how Americans cancel subscriptions and memberships. The "click-to-cancel" rule, crafted by the Federal Trade Commission, was scheduled to take effect on July 14 and would have required companies to make cancellation as simple as signing up. Instead, the US Court of Appeals for the Eighth Circuit vacated the rule, citing procedural missteps by the FTC.

The court's decision arrived just days before the rule's implementation. The three-judge panel found that the FTC, under the leadership of former Chair Lina Khan, failed to follow a key step in the federal rulemaking process.

At issue was the agency's obligation to conduct a preliminary regulatory analysis when a rule is expected to have an annual economic impact of $100 million or more. The FTC initially estimated the costs would fall below this threshold, but an administrative law judge later concluded that compliance costs would exceed $100 million. Despite this, the FTC proceeded without the required preliminary analysis, issuing only a final analysis alongside the completed rule.

The court made clear that its ruling was not an endorsement of deceptive business practices. Judges acknowledged that many Americans have been trapped in recurring subscriptions they no longer want, sometimes because companies make cancellation difficult.

The FTC's now-vacated rule was designed to address these issues by requiring clear disclosures, express consumer consent, and straightforward cancellation options for negative option marketing, where silence or inaction is treated as agreement to continue a service.

But the panel found that the FTC's shortcut deprived businesses and industry groups of the chance to meaningfully comment on the rule's alternatives and cost-benefit analysis. The judges warned that allowing agencies to sidestep these steps could lead to future abuses of the rulemaking process, undermining transparency and public participation.

Industry opposition to the rule was strong, with lawsuits filed by cable companies, trade associations, and the US Chamber of Commerce. These cases were consolidated in the Eighth Circuit, which ultimately ruled that the FTC's procedural error was "fatal" to the rule's validity. The court's decision vacated the rule in its entirety, rather than leaving some parts in place.

The FTC's proposal, first introduced in March 2023, had drawn thousands of public comments and was approved by a narrow 3-2 vote in October 2024. Both Republican commissioners, Melissa Holyoak and Andrew Ferguson, voted against it, arguing the rule was too broad and rushed through ahead of the 2024 election. Since then, the FTC has shifted to Republican leadership following the departure of Khan and the removal of remaining Democratic commissioners.

For now, the defeat of the click-to-cancel rule leaves consumers with the status quo: companies are not required to make cancellation as easy as enrollment, and the FTC must decide whether to restart the lengthy rulemaking process.

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Isn't this how it always goes in the US (regardless of administration)?
Idea: Something good for consumers.
Whoever should pass it: Yeah, good idea let's go with that
*Lobbyists and/or other forms of 'behind closed doors' meeting*
Whoever should pass it: Nah this isn't important enough, or this places unfair restrictions on companies, or hey let's do it like this watered down version of it that effectively changes nothing but looks like we're throwing you a bone.

--

This might be one of the more clear examples of something that should obviously be how things are implemented - but screw consumers, companies are more important (because a lot of politicians and other people in positions of power sure like getting gifts or just straight up money).
 
This is an obvious loss but at the same time I don't think we need the government to hold our hands through the process of cancelling a subscription. It's not hard, even if there are multiple screens. I've done it and it's annoying. Who cares? Deal with it unless you want to pay for something you don't want anymore. How long does it take, 5 minutes?

"My life is ruined because I had to click through 5 screens instead of 1 so I gave up and now I gotta pay this bill forever because I suck." Literal first world pillow soaking problem.

It's not hard to cancel a subscription and defeat the company by doing so. Click through a few screens, you'll survive and then you can go outside.
 
Of course leave it to corporations to keep getting away with their scummy business practices...but what else can we expect when the whole Trump administration is constantly advocating for them.
And those Democrats you love so much didnt do this in the 2 years they controlled the courts, the legislative branch, and the presidency because......?
Isn't this how it always goes in the US (regardless of administration)?
Idea: Something good for consumers.
Whoever should pass it: Yeah, good idea let's go with that
*Lobbyists and/or other forms of 'behind closed doors' meeting*
Whoever should pass it: Nah this isn't important enough, or this places unfair restrictions on companies, or hey let's do it like this watered down version of it that effectively changes nothing but looks like we're throwing you a bone.

--

This might be one of the more clear examples of something that should obviously be how things are implemented - but screw consumers, companies are more important (because a lot of politicians and other people in positions of power sure like getting gifts or just straight up money).
Pretty much. Neither side of the Uniparty really cares about consumer protections or the average voter, onyl consolidating their own power and authority.
This is an obvious loss but at the same time I don't think we need the government to hold our hands through the process of cancelling a subscription. It's not hard, even if there are multiple screens. I've done it and it's annoying. Who cares? Deal with it unless you want to pay for something you don't want anymore. How long does it take, 5 minutes?

"My life is ruined because I had to click through 5 screens instead of 1 so I gave up and now I gotta pay this bill forever because I suck." Literal first world pillow soaking problem.

It's not hard to cancel a subscription and defeat the company by doing so. Click through a few screens, you'll survive and then you can go outside.
There are companies that make this incredibly difficult to find, its not just a matter of "taking time" or "clicking through screens", it involves parsing through layer upon layer of BS legalese and forms littered with traps that reset the process. It's akin to finding the one line of mystery text in a typical EULA.

Speaking of that, you must value your life pretty low if you're OK with having to take 5+ minutes to get a corporation to stop annoying you constantly. We only get one life on this earth, any time I have to take is too much, frankly. This issue shouldnt even exist in the first place.
 
It's not hard to cancel a subscription and defeat the company by doing so. Click through a few screens, you'll survive and then you can go outside.

Wrong. Canceling internet service is not possible with just a bunch of clicks or even online at all without talking to multiple agents.
Xfinity ways to cancel
1. Send us a request and we'll call you back. - never call back even after filing out the form multiple times
Chat options: If you say cancel service, you'll just be bounced to the form. You have to lie and say you want to upgrade or add services. They'll connect you immediately. Then you have to argue with them to cancel. After asking a multiple times, they finally do it. Then you find out they kept your modem tied to the cancelled account. Can't use it anywhere else. Have to again get on chat and straighten that out. I'm sure it's not intentional.
2. Send us a letter to this address
3. Come to our office

Tmobile ways to cancel
1. Call Indian call center
2. Be transferred multiple times with no reason
3. Get to a US person who actually does the canceling and he's acting like he doesn't know why you're calling
4. For some reason need to stay on the call while he does all his stuff
5. Go to Tmobile store to return the modem. They don't want it.
6. Convince them to take back their own modem
7. Finally drive home
 
Let's hope FTC amends their filing and it goes through. I would not be surprised if the companies bribed agent orange even after losing in court and he has the FTC drop this rule or not enforce it.
 
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