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'Click-to-Cancel' cancelled?: US court blocks new rule that would have made canceling subscriptions easier
A US court just stopped a new rule that would have let people cancel unwanted subscriptions with a simple click, keeping tricky auto-renewals harder to escape, for now.
Image: sam-pak via Unsplash
A federal appeals court in the US has blocked a new Federal Trade Commission rule that would have required businesses to make it easier for consumers to cancel unwanted subscriptions, halting the policy just days before it was set to take effect, AP stated in a report.
The rule, finalized by the FTC in October as part of the Joe Biden administration’s “Time is Money” initiative to reduce consumer hassles, would have required companies to obtain clear consent before charging customers for memberships, auto-renewals and free trial conversions. The measure also called for transparent disclosures about when free trials end and mandated that customers be able to cancel recurring subscriptions as easily as they signed up, media reports added.
The US Court of Appeals vacated the rule last week, stating that the FTC failed to conduct a preliminary regulatory analysis required for rules with an estimated annual economic impact exceeding $100 million. The FTC argued that it initially projected the economic impact to fall below that threshold, but an administrative law judge later concluded that the impact would surpass it.
The blocked rule was part of a broader push by the previous US administration to address practices that make it difficult for consumers to exit paid services. While the FTC’s proposal aimed to curb aggressive subscription tactics, the court’s decision marks a setback for regulators seeking to enforce consumer protections in the digital economy.
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