US Court Blocks FTC’s ‘Click-to-Cancel’ Subscription Rule
- tech360.tv
- Jul 10, 2025
- 2 min read
A federal appeals court has blocked a new Federal Trade Commission rule that would have made it easier for consumers to cancel subscriptions and memberships online.
The “click-to-cancel” rule was scheduled to take effect Monday. It would have required businesses to obtain customer consent before charging for memberships, auto-renewals, and programmes tied to free trial offers.
The rule also mandated that companies clearly disclose when free trials or promotional offers would end and allow customers to cancel recurring subscriptions as easily as they signed up.
The FTC adopted the rule in Oct. as part of President Joe Biden’s “Time is Money” initiative, which aims to reduce consumer-related hassles across government agencies.
However, the U.S. Court of Appeals for the Eighth Circuit ruled this week that the FTC failed to conduct a preliminary regulatory analysis. Such an analysis is required for rules expected to have an annual economic impact exceeding USD 100 million.
The FTC initially claimed the rule would not surpass the USD 100 million threshold. But an administrative law judge later determined the economic impact would exceed that amount.
The court vacated the rule, stating that while it does not support deceptive marketing practices, the FTC’s procedural errors invalidated the rulemaking process.
The FTC declined to comment on the decision.
Meanwhile, the agency is preparing for a trial involving Amazon’s Prime programme. The FTC has accused Amazon of enrolling users without consent and making cancellation difficult. The trial is expected to begin next year.
FTC’s “click-to-cancel” rule blocked by federal appeals court
Rule aimed to simplify subscription cancellations and require consent for charges
Court cited FTC’s failure to conduct required economic impact analysis
Source: AP NEWS
