• by Wendy Davis  @wendyndavis, October 16, 2024

The Federal Trade Commission on Wednesday issued a set of regulations aimed at making it easier for consumers to cancel subscriptions to newspapers, gyms, retailers and other businesses.

Among the most significant of the new rules are requirements that companies offer a simple cancellation mechanism, and allow consumers to cancel subscriptions through the same medium that was used to purchase them.

“You can’t require people to talk to a live or virtual representative to cancel if they didn’t have to do that to sign up,” the FTC wrote in its Business Blog.

In practice, the new rules -- dubbed "click to cancel" -- mean that newspapers, magazines and other companies that allow people to use an online platform to subscribe must also allow people to cancel online.

The agency passed the rules 3-2, with Republican commissioners Melissa Holyoak and Andrew Ferguson opposing the regulations.

The FTC first proposed “click-to-cancel” in March 2023, stating that cancellation mechanisms should be “at least as easy to use as the method the consumer used to buy the product or service in the first place.”

The proposal drew opposition from trade groups including the Interactive Advertising Bureau and Association of National Advertisers.

“Requiring 'simple' cancellation is a difficult standard for businesses to implement, as there is little detail provided to guide them to understand its meaning and how to comply with this ambiguous requirement,” the Association of National Advertisers said in written comments filed in June 2023.

The ad group also said a requirement to offer cancellations through the same channels as subscriptions may be too restrictive in some circumstances -- such as when consumers subscribe through an “Internet of Things” device.

In some respects the rules approved Wednesday are narrower than the ones proposed last year.

Notably, the new regulations don't limit companies' ability to “save” a subscription by offering a better price.

By contrast, the proposed rules would have required companies to ask consumers whether they wanted to hear an offer before making one.

The FTC said Wednesday that its original proposal regarding saves “did not achieve the right balance between protecting consumers from unfair tactics and allowing sellers to provide necessary and valuable information about cancellation.”

The Interactive Advertising Bureau had argued to the FTC that restricting “saves” would have posed First Amendment concerns because the restriction could have outlawed truthful commercial speech.

The IAB also said the proposed restriction on saves “would neither simplify nor speed up the cancellation process for consumers, because it would entail consumers having to answer a question along the lines of 'Would you like to consider a different price or plan that could save you money?'”

The FTC's new rules are slated to take effect 180 days after they're published in the Federal Register.