Federal Appeals Court Blocks FTC Rule Requiring Easy Subscription Cancellation

A federal appeals court blocked a Federal Trade Commission rule requiring companies to make canceling subscriptions as simple as signing up. The rule, known as "click to cancel," aimed to address issues like auto-renewals without informed consent. The court ruled that the FTC missed a procedural step, a preliminary regulatory analysis, and the rule was blocked due to this error. Consumer advocates are frustrated, as the rule was set to go into effect on July 14.

A federal appeals court has struck down the Federal Trade Commission's (FTC) "click to cancel" rule, which aimed to simplify the process of canceling subscriptions. The court ruled that the FTC failed to conduct a preliminary regulatory analysis, a procedural requirement for rules with an estimated annual impact exceeding $100 million on the national economy [1].

The "click to cancel" rule, announced by the FTC under then-Chair Lina Khan in October 2024, required companies to make canceling subscriptions as easy as signing up. It also aimed to prevent auto-renewals without informed consent. The rule was set to take effect on July 14, 2025, but the U.S. Court of Appeals for the 8th Circuit in St. Louis blocked it [2].

The court found that the FTC did not conduct a preliminary regulatory analysis despite the rule's potential impact on the national economy. The FTC had initially estimated the costs would not exceed the threshold but later amended its estimate and did not issue a preliminary analysis [3].

Consumer advocates are frustrated by the ruling, as the rule was designed to protect consumers from difficult cancellation processes and auto-renewals without consent. The rule faced opposition from industry groups, which argued it overstepped the FTC's mandate and would burden businesses [1].

The FTC has not yet commented on the appeals court ruling. The court's decision means the FTC would need to repeat most of the rulemaking process if it decides to reissue the "click to cancel" rule [1].

References:
[1] https://www.washingtonpost.com/business/2025/07/09/ftc-us-court-block-click-to-cancel/
[2] https://san.com/cc/ftcs-click-to-cancel-rule-rejected-by-appeals-court/
[3] https://finance.yahoo.com/news/federal-appeals-court-blocks-rule-to-make-getting-out-of-subscriptions-easier-172910669.html