Back in October of last year, the United States Federal Trade Commission (FTC) announced a finalized Click-to-Cancel rule that would require merchants to make their subscription service cancellation processes one-step.
The Commission’s ruling established a legal framework to prohibit businesses from “failing to provide a simple mechanism to cancel the negative option feature and immediately halt charges.”
Click-to-Cancel, along with all of its approved provisions, was scheduled to take effect 180 days after it was published in the Federal Register. A change in government administration in the United States, as well as lawsuits filed by major telecommunications and entertainment businesses, threw this chronology off track.
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Surprisingly, the US Court of Appeals for the 8th Circuit overturned the FTC’s Click-to-Cancel rule, casting doubt on the feasibility of easy single-click cancellation across digital subscription services. In its decision, the court highlighted “procedural deficiencies,” with all three panel justices agreeing.
The FTC has released a new “Click-to-Cancel” rule, requiring corporations to make it easier for customers to cancel their subscriptions.
Subscription-based services are readily available nowadays. Across cinema, television, video games, music, books, news, shopping, fitness, and everything in between, service providers will provide a set of paid subscription tiers with recurring bill cycles.
Often, you may expect those service providers to offer confusing subscription price ladders, opaque terms and conditions, and, of course, a slew of hoops to jump through in order to terminate an existing subscription or trial period.
It is unclear whether the Commission will try to restructure its efforts with a revised rule.
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The FTC’s Click-to-Cancel rule aims to counteract this anti-consumer behavior of hiding cancellation alternatives from consumers. This would have been a huge success in terms of transparency, providing a considerably more straightforward and user-friendly way to cancel unwanted subscription payments. A one-time subscription cancelation button, on the other hand, isn’t exactly at the top of Adobe, Amazon, Netflix, and other industry titans’ wish lists.
As of now, the FTC has not commented on this development. It’s unclear whether the Commission will try to restructure its efforts with a revised rule, or if Click-to-Cancel will be abandoned before it even has a chance to be implemented. The Commission’s track record of opposing big tech is patchy; for example, it failed to make a significant objection to Microsoft’s acquisition of Activision-Blizzard-King in 2023. Given the current political climate in the United States, it would not surprise me if the FTC eventually threw in the towel on this particular battle.
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