On July 14, a significant consumer protection effort was halted when the U.S. Court of Appeals for the 8th Circuit overturned the Federal Trade Commission’s (FTC) proposed “click-to-cancel” rule. The rule was designed to make it easier for consumers to cancel subscriptions—especially those involving deceptive or complicated terms. In today’s digital economy, where recurring billing models dominate, the rule aimed to level the playing field by requiring businesses to offer clear and simple cancellation options.
However, the court’s unanimous decision wasn’t based on the rule’s merit, but rather on procedural missteps in how it was introduced. The result leaves millions of consumers navigating a web of confusing subscription practices with no immediate regulatory relief in sight.
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A Unanimous Decision Based on Procedure, Not Policy
The three-judge panel—two of whom were appointed during Donald Trump’s first term—unanimously reversed the FTC’s click-to-cancel rule. The judges emphasized that their decision was not about the substance of the policy, which sought to protect consumers from deceptive practices. Rather, it was about how the policy was implemented.
“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 panel wrote.
The Regulatory Flaw That Undermined the Rule
Central to the court’s decision was the FTC’s failure to conduct a preliminary regulatory impact analysis. This analysis is mandatory for any rule expected to have an economic effect exceeding $100 million annually. Although the FTC initially determined the rule would not cross that threshold, an administrative law judge later disagreed.
Because of this misstep, the FTC did not satisfy its legal obligations, nor did it provide businesses with sufficient time to respond during the public comment period.
Industry Pushback Played a Key Role
The rule was fiercely opposed by lobbying groups representing sectors that have long benefited from convoluted cancellation systems—cable and internet providers, insurance companies, and fitness chains among them. These industries argued that making cancellation easier could lead to a flood of “accidental cancellations,” a claim that underscores their perception of consumers as careless or uninformed.
Their opposition helped pave the way for the court challenge and ultimately the rule’s demise.
A Political Roadblock to Revival
Although the court expressed some sympathy for the rule’s intent, its future looks bleak—especially under the current leadership. The rule was originally advanced during the Biden administration, and both Republican commissioners at the time voted against it.
Now, Andrew Ferguson—one of those dissenting votes—leads the FTC, and with no Democratic commissioners currently serving, any effort to revive or revise the rule appears unlikely in the near term.
What This Means for Consumers
For the foreseeable future, consumers can expect more of the same: long customer support waits, outdated cancellation methods, and endless hoops to jump through to exit a subscription. While the FTC’s goal was to simplify and protect, the court’s procedural ruling has delayed progress on that front.
Unless new leadership revives the effort with proper regulatory groundwork, the burden remains on consumers to navigate the maze of modern subscription services.
Frequently Asked Questions
What was the FCC rule about?
The FCC rule, often called the “click-to-cancel” rule, aimed to make it as easy for consumers to cancel subscriptions as it is to sign up. It targeted businesses that rely on complex cancellation procedures to retain customers.
Why was the rule struck down?
The rule was overturned due to procedural issues. The court found that the FTC failed to conduct the required regulatory analysis for rules with significant economic impact, violating administrative law.
Who opposed the rule?
Several industry lobbying groups, including those representing cable providers, gyms, insurance companies, and internet services, opposed the rule. These industries often benefit from complex cancellation policies.
What does this mean for consumers?
Consumers must continue dealing with difficult and often frustrating cancellation processes. There are currently no federal rules requiring businesses to simplify them.
Can the rule be revived?
Not easily. With a change in FTC leadership and no Democratic commissioners currently serving, it’s unlikely the rule will be revived anytime soon—especially under a Trump-aligned administration.
Conclusion
The court’s decision to strike down the FTC’s click-to-cancel rule marks a significant setback for consumer protection in the digital age. While the ruling hinged on procedural flaws rather than the rule’s intent, the outcome leaves millions vulnerable to outdated and often predatory cancellation practices. Businesses that rely on confusing opt-out systems can continue to do so unchecked—for now.
Without immediate action from policymakers or a shift in regulatory leadership, consumers are left to navigate a system that favors corporate retention strategies over transparency and choice.