The Fate of Click to Cancel
In October, 2024, the Federal Trade Commission (FTC) announced its new click-to-cancel rule. As I noted in a blog post entitled “The FTC Has Made Its Decision, Now Let It Enforce It”:
The rule requires sellers to make it as easy to cancel subscriptions as it is to start them. The vote to adopt the rule was 3-2. along party lines. The statement from dissenting Commissioner Holyoak makes clear that the rule, due to go into effect in 180 days, may never see the light of day. Like the FTC rule on non-competes, . . . this rule is likely to be challenged and enjoined before it can go into effect. The title of this post is a commentary on how much the world has changed since the days of Andrew Jackson. The FTC has made its decision, but the courts likely will enjoin its enforcement. Jacksonian autocracy has been displaced by juristocracy.
Indeed, in July, James R. Hood, Founder and former Editor of Consumer Affairs reported that click to cancel was canceled. In fact, the Eighth Circuit invalidated the rule in Custom Communications, Inc. v. Federal Trade Commission. The Court did so on largely procedural grounds. The FTC estimated that the rule would have an annual economic impact in excess of $100 million In such cases, it must first undertake a preliminary regulatory analysis, and it failed to do so. Its error was not harmless because it deprived those opposed to the rule of an opportunity to present the FTC with evidence that there were less-burdensome alternatives to the proposed rule. Allowing the FTC to proceed in violation of its ordinary procedures would embolden agencies to manipulate the rule-making process.
Now, there are signs that Congress might actually address this problem. According to that same James R. Hood, still reporting in Consumer Affairs, there is a movement to revive the FTC’s dormant regulation. That movement has found expression in a bipartisan bill called The Unsubscribe Act, sponsored by Democrat Mark Takano, Maark Amodei, and Seth Magaziner.
Meanwhile, Wendy Davis, writing for MediaPost, reports that the FTC is also attempting to revive the rule. The FTC receives a lot of complaints about the difficulties consumers face in terminating unwanted subscriptions. This is the sort of popular reform that Republican administrations can easily effect and take credit for, even though Republicans opposed the reforms when introduced under Democratic administrations. Or, if you prefer, with bipartisan support, The Unsubscribe Act or the new FTC regulation will achieve reasonable regulation without the excess and overreach that characterized the original partisan Click to Cancel regulation. Spin it how you like, I’ll take it.
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