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Appeals Court Vacates FTC Click-to-Cancel Rule Days Before Enforcement

Eighth Circuit judges ruled that omitting a mandatory economic impact analysis invalidated the regulation, forcing the agency to restart the rulemaking process

FILE - The logos for streaming services Netflix, Hulu, Disney Plus and Sling TV are pictured on a remote control on Aug. 13, 2020, in Portland, Ore. (AP Photo/Jenny Kane, File)
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Washington, DC, USA - June, 10, 2021: Federal Trade commission exterior building.

Overview

  • The court vacated the FTC’s click-to-cancel rule on procedural grounds just days before its scheduled July 14 enforcement date
  • Judges found the agency failed to conduct a required preliminary regulatory analysis for rules with over $100 million in annual economic impact
  • The rule aimed to address surging consumer complaints—nearly 70 per day in 2024—by requiring cancellations via the same method used to sign up and banning deceptive negative option practices
  • Business groups including the U.S. Chamber of Commerce and major cable and internet providers successfully challenged the rule as arbitrary and procedurally flawed
  • FTC must initiate fresh rulemaking with a mandated economic analysis, leaving the future of simplified subscription cancellations uncertain