US appeals court blocks FTC’s ‘click-to-cancel’ rule for subscriptions

A recent decision by a U.S. appeals court has put the brakes on the Federal Trade Commission's proposed 'click-to-cancel' rule aimed at simplifying subscription cancellations. The ruling, issued by the 8th U.S. Circuit Court of Appeals in St. Louis, highlighted that the FTC, under the direction of former Chair Lina Khan, did not adequately assess the potential costs and benefits of this new regulation before its implementation. Set to take effect on July 14, the rule was designed to ensure that customers could cancel subscriptions as easily as they could enroll. It mandated that businesses provide a straightforward cancellation process, mirroring the simplicity of the sign-up procedure. For instance, if a customer could join a service with just a few clicks, the cancellation process should not involve excessive navigation through webpages or interaction with automated chat systems. Moreover, the regulation aimed to require companies to secure explicit consent from consumers prior to charging them for memberships, automatic renewals, or services associated with free trial offers. This ruling represents a significant setback for consumer protection advocates who argue that such measures are essential for safeguarding the rights of subscribers.