US appeals court blocks FTC’s ‘click-to-cancel’ rule for subscriptions

A U.S. appeals court has blocked the Federal Trade Commission’s “click-to-cancel” rule that would have required companies to make it as easy to cancel a subscription as it was to sign up. The rule was set to take effect on July 14.

Reuters reports that the 8th U.S. Circuit Court of Appeals in St. Louis said on Wednesday that the FTC, which passed the rule under former Democratic Chair Lina Khan, had failed to conduct a preliminary analysis of the costs and benefits of the rule.

The regulation would have required businesses to allow customers to cancel their subscriptions using the same method they used to sign up. For example, if signing up for a membership only took a few clicks, canceling it shouldn’t require navigating through numerous web pages or dealing with a chatbot.

The rule would also have required businesses to obtain consent before charging customers for memberships, auto-renewals, or programs tied to free trial offers.