FTC To Hear From IAB, Cable Lobby, Others About 'Click-To-Cancel' Proposal

The Federal Trade Commission plans to hear from the online ad industry and cable lobby at an upcoming virtual hearing about proposed rules that aim to make it easier for consumers to cancel automatically-renewing subscriptions and other recurring fees.

The hearing, which will take place in January, addresses potential "click-to-cancel" rules, including ones that would require companies to allow consumers to cancel subscriptions through the same medium used to purchase them. For instance, newspapers that sell subscriptions through online platforms would also have to allow online cancellations, under the proposed rule.

Another proposal would limit companies' ability to entice people to abandon cancellation requests, such as by offering unsolicited discounts.

The FTC is slated to hear from six groups at the proceeding -- the Interactive Advertising Bureau, NCTA--The Internet & Television Association, International Franchise Association, TechFreedom, the Performance Driven Marketing Institute, and FrontDoor.



The Interactive Advertising Bureau criticized the proposed regulations earlier this year, arguing that the potential rules could hinder companies that offer simple cancellation mechanisms, but “failed to make their cancellation mechanism symmetrical to their sign-up experience.”

The group also argued that a proposal to restrict discount offers could violate the First Amendment by outlawing “truthful commercial speech.”

The Association of National Advertisers (which isn't slated to appear at the virtual hearing) also weighed in against the proposed regulations, arguing in a written filing that the rules “would create consumer frustration and unnecessary burdens,” are “out-of-step with the ways businesses and consumers interact,” and “would impose excessive restrictions on sellers’ ability to communicate with their customer base.”

The cable industry group NCTA--The Internet & Television Association raised similar concerns, but additionally argued that even if the FTC adopts the proposed regulations, they shouldn't apply to broadband, cable and video streaming services.

“Consumers understand that these services are billed through automatic renewal and appreciate that their crucial services will continue without interruption until they cancel,” that group wrote. “Consumers provide unambiguous express informed consent to enroll in these services, which they typically and actively integrate into their everyday life. When consumers do choose to cancel, they receive important information during the cancellation interaction regarding various choices and consequences that follow from terminating service.”

The hearing will take place January 16, and be presided over by Securities and Exchange Commission Administrative Law Judge Carol Fox Foelak. 

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