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‘Click to Cancel’ or ‘Click and Suffer’: OTT platforms risk legal action over subscription retention tactics
As half of Indian OTT users report difficulties in cancelling subscriptions, legal experts and consumer advocates urge urgent regulatory clarity.
A recent U.S. court ruling may embolden OTT platforms to further complicate subscription exits, but India’s consumer law might not allow it. (Image source: unspalsh)
When a U.S. federal court blocked the Federal Trade Commission’s (FTC) proposed “click-to-cancel” rule, designed to make it easier for users to cancel digital subscriptions, the impact rippled far beyond American shores. For India, where the OTT subscription economy is booming, the decision raises pressing concerns: Will Indian platforms use this as a cue to embed more friction in cancellation flows? And if they do, what can the law and regulators do to stop it?
A recent LocalCircles survey highlights the depth of consumer frustration.
According to the data, 50% of Indian OTT users report difficulty in cancelling their subscriptions, citing opaque paths, excessive steps, or unclear terms. The most common grievance is the presence of multi-step processes, which often involve logging in through a desktop browser, navigating through buried settings, or dealing with customer service before a cancellation can be processed.
This consumer pain point is not just a design flaw— it’s fast becoming a legal and ethical battleground.
A 2023 U.S. investigation found that cancelling Amazon Prime Video required navigating four different pages, six clicks, and answering 15 prompts. This led the FTC to sue Amazon, alleging deceptive practices — a lawsuit that is still ongoing.
A Growing Regulatory Void
“In India, if a cancellation process is significantly harder than signing up, it could qualify as a deceptive or coercive trade practice under Section 2(47) of the Consumer Protection Act, 2019,” said Divya Singh, Advocate at Jotwani Associates. She added that Rule 4(9) of the Consumer Protection (E-commerce) Rules, 2020, mandates accessible cancellation policies, and that OTT platforms adopting such “dark patterns” could be operating in breach of these norms.
Siddharth Chandrashekhar, Advocate at the Bombay High Court, echoed this view, noting that while TRAI does not currently regulate user interface design, such practices could come under scrutiny by the Central Consumer Protection Authority (CCPA) or even the Competition Commission of India (CCI) if they are deemed to be intentionally misleading or manipulative.
“Platforms may not be legally compelled to simplify cancellation, but from a corporate policy standpoint, global UX uniformity is often cited to justify friction, even in India. The U.S. court's ruling removes a regulatory deterrent. That could inspire more complexity elsewhere,” Chandrashekhar warned.
The LocalCircles survey, based on inputs from over 95,000 verified users across 353 districts, found that 50% of respondents have frequently experienced difficulty in cancelling subscriptions due to the lack of a clear option or the feature being deliberately hidden within the platform interface.
Among the nine dark patterns identified and validated across 245 platforms studied, interface interference was one of the most prevalent, with 86% of consumers stating that they have frequently encountered situations where buttons to decline offers or cancel subscriptions were “difficult to find, greyed out, or smaller in font compared to ‘Accept’ or ‘Subscribe’ options.”
The report further pointed out that OTT platforms are known to use deceptive practices to manipulate a user interface to make it difficult for consumers to take certain actions, such as cancelling subscriptions or deleting accounts.
Additionally, users pointed out the practice of bait and switch, where 53% of users reported being unaware at the time of subscription that some shows or films would require additional rental payments, or in some cases platforms demanding that they pay a higher price for an ad-free viewing experience.
Legal Grey Zones, Real-World Impact
While the FTC’s rule in the U.S. was struck down on procedural, not substantive, grounds, Indian experts caution that global OTT players like Netflix, Prime Video, and Disney+ may use the temporary rollback to justify sluggish or opaque cancellation processes in India.
According to Sonam Chandwani, Managing Partner at KS Legal, “Multi-step cancellation mechanisms, especially those involving deliberate opacity or nudging, are likely to fall under the ambit of unfair trade practices.”
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She added that the CCPA has already issued guidelines in 2023 to crack down on dark patterns, and the Digital India Act presents an opportunity to codify one-click cancellations as a statutory right. “This is not just good policy, it’s a rights issue,” Chandwani emphasized.
The 2023 CCPA guidelines classify manipulative cancellation designs as “interface interference,” and while not every multi-step process is a violation, overly complex flows involving redirection, hidden buttons, or forced customer interactions may be legally actionable.
Snigdhaneel Satpathy, Partner at Saraf and Partners, notes that in India, OTT platforms are not currently subject to a unified consumer experience mandate for subscription cancellations. However, Indian OTT services often align with global standards, especially those operated by multinational entities. Potentially, under India’s Consumer Protection Act, 2019, any practice that misleads or causes inconvenience to consumers—especially if it’s designed to obstruct cancellation—could be deemed “unfair trade practice.”
Global Ruling, Local Responsibility
“Platforms may argue for a uniform global design, but India must insist on user-first experiences,” said Sourya Banerjee, Associate Director, Public Policy Communications & Advocacy at Jajabor Brand Consultancy.
Banerjee pointed out that India's legal ecosystem already offers some guardrails, such as RBI’s recurring debit rules, which require explicit user consent for subscription renewals. However, these protections don’t always extend to account deletions or service exits, often left to platform discretion.
Banerjee stressed that while no new policy may be immediately necessary, regulators must closely monitor industry practices. “If platforms force users to go to websites to cancel subscriptions started on mobile apps, this may not violate the law per se, but it’s certainly bad faith design in the smartphone-first Indian market.”
India’s subscription economy is expected to surpass $3.5 billion by 2026, yet the legal and regulatory infrastructure to govern consumer exit rights remains inadequate. As OTT services blur the lines between media, technology, and commerce, experts argue that inter-agency coordination between TRAI, MeitY, and CCPA is essential.
Experts agree that a 'one-click cancellation' mandate, inspired by the FTC’s original intent, is not just feasible, it’s necessary. Such a requirement would align with global best practices while safeguarding Indian users from exploitative retention schemes.
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