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6h ago

Appeals Court Voids FTC’s Click-to-Cancel Rule Over Skipped Economic Analysis

The ruling may force a full restart of the FTC’s rulemaking to satisfy procedural requirements before advancing similar consumer protections.

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United States Federal Trade Commission logo and U.S. flag are seen in this illustration created on April 23, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
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)

Overview

  • The Eighth Circuit found the FTC failed to conduct a required preliminary regulatory analysis for a rule exceeding $100 million in annual impact and vacated it just days before its July 14 start date.
  • The click-to-cancel measure would have expanded the FTC’s 1973 Negative Option Rule to require cancellation methods as easy as sign-ups and bar barriers like chatbots and lengthy agent calls.
  • The U.S. Chamber of Commerce and major cable, internet and media trade groups successfully challenged the rule, arguing the agency overstepped its authority and skipped mandated procedures.
  • The rule aimed to curb deceptive negative option marketing, addressing a surge in subscription complaints from 42 per day in 2021 to nearly 70 in 2024.
  • With the vacatur in place, the FTC is likely to restart rulemaking, incorporating the court-mandated economic review before reissuing any revised consumer safeguards.