July 10, 2025
The Federal Trade Commission’s plan to protect consumers from harmful subscription practices with “click-to-cancel” policy has failed.
A federal appeals court has shut down the Federal Trade Commission’s proposed “click-to-cancel” rule.
Judges on the Eighth Circuit of the U.S. Court of Appeals denounced “deceptive practices” but asserted a procedural failing on the part of the FTC. According to reporting by NBC, the FTC failed to include a preliminary regulatory analysis in its pursuit of “click-to-cancel.” The analysis is required when the economic impact of the FTC policy on the economy exceeds $100 million. Courts deemed that the policy would indeed exceed the threshold.
“While we certainly do not endorse the use of unfair and deceptive practices in negative option marketing, the procedural deficiencies of the Commission’s rulemaking process are fatal here,” the court wrote.
The policy was first introduced during the Biden administration. Its goal was to protect consumers from predatory subscription policies. The agency cited a five-year increase in claims as its reason for seeking subscription solutions. According to the FTC, it receives over 70 complaints daily. Many companies automatically enroll subscribers in services they no longer want or need without the consumer’s consent. Furthermore, options to cancel services are often difficult to access. The FTC stated its intentions to curb this behavior.
“Too often, businesses make people jump through endless hoops just to cancel a subscription,” said Commission Chair Lina M. Khan in a statement. “The FTC’s rule will end these tricks and traps, saving Americans time and money. Nobody should be stuck paying for a service they no longer want.”
The FTC outlined specific objectives to protect consumers from predatory subscription practices:
- Misrepresenting any material fact made while marketing goods or services with a negative option feature.
- Failing to clearly and conspicuously disclose material terms prior to obtaining a consumer’s billing information in connection with a negative option feature;
- Failing to obtain a consumer’s express informed consent to the negative option feature before charging the consumer; and
- Failing to provide a simple mechanism to cancel the negative option feature and immediately halt charges.
Though the policy will no longer move forward, the FTC continues to hold individual companies accountable for similar practices. It is unclear if the FTC will adjust its petition in an attempt to refile.
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