Click to Cancel Rule Struck Down

A federal appeals court has struck down the FTC’s “click to cancel” rule, a regulation that aimed to make canceling subscriptions as easy as signing up. Finalized in March 2024, the rule required businesses to offer a clear, simple way, such as a single click, to cancel recurring charges and subscriptions. It also barred companies from using tactics like long wait times or aggressive retention offers to obstruct cancellation. But in a 2-1 decision, the D.C. Circuit Court ruled that the FTC overstepped its authority under Section 18 of the FTC Act, stating the agency lacked clear congressional approval to enforce such sweeping changes.

While business groups applauded the ruling as a win for innovation and regulatory restraint, consumer advocates warn it could open the door to more deceptive subscription practices. For years, companies have been criticized for using “dark patterns” to trap consumers in subscriptions they no longer want. Without a federal mandate to simplify cancellations, millions may now face more frustrating and costly experiences when trying to opt out. The ruling leaves legal uncertainty for both businesses and consumers, as the industry now braces for potential next steps from lawmakers or future court challenges.