FTC’s ‘click to cancel’ subscription rules thrown out by judges

There’s not a lot that Americans can universally agree on at the moment, but the Federal Trade Commission’s new rules that digital subscriptions should be easy to cancel received broad acclaim. Everyone liked the idea, with the possible exception of your local gym owner. And, it appears, three federal judges, who threw out the new rule shortly before it was scheduled to go into effect.

The reasons are complicated and procedural, as Ars Technica explains. To state it as briefly as possible, the FTC can put in new rules without broader federal oversight, if those rules will have less than $100 million USD in economic impact per year. The FTC, under the leadership of Democratic Chairwoman Lina Kahn in 2023, determined that this rule would slide under that requirement. The panel of three federal judges disagreed, and said that businesses did not have enough time to make out their case before the rule would go into effect on July 14 of this year.

The rule is thus thrown out, and U.S. businesses can continue to make customers go to excessive and time-consuming lengths to cancel easily started subscription services without fear of reprimand. Such tactics include calling in on a phone line in order to verbally confirm cancellation, sending in a certified letter to confirm cancellation, and jumping through a flaming hoop while reciting the alphabet backwards in order to confirm cancellation. Okay, that last one might just be how it feels.

The Federal Trade Commission could always resubmit a revised version of the rule, and submit it to further federal oversight if it determines that it passes that $100 million threshold. But with business-friendly conservatives in control of both the Commission and the federal government, that seems exceedingly unlikely for the time being. President Trump fired both remaining Democrats on the five-person Commission without cause in March, in violation of federal law and Supreme Court precedent.

Even if both Commissioners are restored on legal challenges, the FTC’s ability and will to oppose corporate interests will still be effectively nullified by a 3-2 majority. That means Americans will need to keep limber and jump through those cancellation hoops for the foreseeable future.