‘Click-to-cancel’ rule to make canceling subscriptions easier blocked by court
Summary
A court blocked a new rule from the Federal Trade Commission (FTC) that would have made it easier for people to cancel subscriptions. The rule was supposed to start soon, but the court said the FTC didn't follow required steps in their process.Key Facts
- The new rule, called "click-to-cancel," aimed to help consumers easily cancel unwanted subscriptions.
- The rule required businesses to get customer approval before charging for memberships or renewals.
- Businesses also needed to tell customers when free trials were ending and make cancellations easy.
- The Biden administration supported this rule as part of its "Time is Money" effort to reduce consumer hassles.
- The rule was blocked by the U.S. Court of Appeals for the Eighth Circuit due to procedural mistakes.
- The court said the FTC should have done a preliminary analysis because the rule could impact the economy by more than $100 million yearly.
- An administrative judge stated the rule would have more than a $100 million economic impact.
- The FTC is also preparing for a trial against Amazon regarding its Prime program over subscription issues.
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