• by Wendy Davis  @wendyndavis, October 23, 2024

The Federal Trade Commission lacked valid grounds for the new “click to cancel” regulations that aim to make it easier for people to terminate subscriptions to newspapers, gyms, retailers and other businesses, the Michigan Press Association and National Federation of Independent Business say in a lawsuit challenging the rules.

The regulations are “arbitrary, capricious, and an abuse of discretion,” the groups write in a petition filed Tuesday with the 6th Circuit Court of Appeals. The organizations also say the FTC lacked “substantial evidence” to support the rules, and that the organization exceeded its authority.

The Michigan Press Association -- which represents 320 newspapers and independent publications within the state -- and the National Federation of Independent Business haven't yet elaborated on their argument.

Among other provisions, the new rules require companies to offer a simple cancellation mechanism, and allow consumers to cancel subscriptions through the same medium that was used to purchase them. In practice, those mandates mean that newspapers and other companies that let people use an online platform to subscribe must also let people cancel online.

The court challenge comes less than one week after the FTC approved the regulations 3-2, with Republican commissioners Melissa Holyoak and Andrew Ferguson voting against them.

Holyoak argued in a written dissent that the new regulations are “an ill-disguised political maneuver” aimed at helping Vice-President Kamala Harris's presidential campaign, noting that Harris and Governor Tim Walz touted the click-to-call initiative in their recent policy statement “A New Way Forward for the Middle Class.”

“Less than a month from election day, the Chair is hurrying to finish a rule that follows through on a campaign pledge made by the Chair’s favored presidential candidate,” Holyoak wrote.

The FTC proposed “click-to-cancel” rules in March 2023, stating that the regulations “would go a long way to rescuing consumers from seemingly never-ending struggles to cancel unwanted subscription payment plans for everything from cosmetics to newspapers to gym memberships.”

The proposal drew opposition from numerous 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.