A federal appeals court has halted the FTC’s “Click-to-Cancel” rule, aimed at streamlining subscription cancellations for consumers. The rule, intended to facilitate easier cancellations for subscription-based services, was set to be enforced starting July 14 but was dismissed due to procedural errors, including the absence of a preliminary cost-benefit analysis. The 8th Circuit Court emphasized the importance of adhering to regulatory processes, which the U.S. Chamber of Commerce commended, reinforcing safeguards against rushed rulemaking.
Former FTC Chair Lina Khan, who advocated for the rule amid increasing consumer complaints about tricky cancellation practices, argued it would protect consumers from unfair marketing tactics. The FTC had received nearly 70 daily complaints about negative option marketing as of 2024. Industry stakeholders, including major media companies and advertising groups, had opposed the rule, arguing that many subscription models already provide accessible cancellation options, despite ongoing challenges for some users navigating cancellation processes.
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