DES MOINES, Iowa (Diya TV) — A U.S. appeals court on Tuesday struck down the Federal Trade Commission’s so‑called “click‑to‑cancel” rule. The rule was set to take effect on July 14. It would have required companies to let consumers cancel subscriptions as easily as signing up.
Consumer advocates praised the rule as a simple fix to a widespread problem. But the Eighth Circuit in St. Louis said the FTC did not follow proper rule‑making steps. The court noted that the agency skipped an early economic analysis. That analysis is mandatory when a rule could affect the economy by $100 million or more a year. Because the FTC did not do it, the court said the omission was “fatal.”
The “click‑to‑cancel” rule targeted negative‑option marketing—where silence is treated as consent. It aimed to end tricks that trap consumers in subscriptions. For instance, if someone signed up online, canceling had to be just as easy. Companies couldn’t hide cancellation options behind complicated menus, chatbots or phone calls.
The Eighth Circuit noted that the FTC first said the rule’s economic impact would be below $100 million. But later estimates showed it was higher. The agency then issued only a final analysis, without a preliminary one. The court said that locked out industry stakeholders from a meaningful chance to comment. The judges described that as an unfair process. The judge’s opinion added: “While we do not endorse unfair practices … the procedural deficiencies … are fatal here.”
The rule drew pushback from industry groups such as the U.S. Chamber of Commerce, NCTA, and the National Federation of Independent Business. They sued, calling the rule overbroad and beyond the FTC’s authority. The Eighth Circuit consolidated their cases and sided with them, saying the FTC “overstepped” by rushing the rule.
Consumer groups are disappointed. John Breyault from the National Consumers League said the court’s decision is a setback—but hopes remain that the FTC or Congress may act. States such as California already have similar protections, and others are following suit. Lina Khan, who led the FTC under the Biden administration, blamed prior delays and urged supporters to push for speedy re‑issuance or congressional law.
Current FTC Commissioner Mark Meador, a Republican, said the agency “cut corners and didn’t follow the law.” Other commissioners have voiced similar concerns. Industry groups praised the ruling. America’s Communications Association‑Connects said the rule would have imposed costly burdens and hurt customer experience.
The FTC now faces a choice: restart the rule‑making process with proper steps, or let states and Congress fill the gap. Analysts say a re‑issued rule could take months or longer—delaying any new regulations into 2026. In the meantime, consumers remain vulnerable to subscription traps. The ruling illustrates how procedural hurdles can stall even widely supported reforms.
