• by Wendy Davis , October 24, 2024

Business groups including the Interactive Advertising Bureau and NCTA--The Internet & Television Association are suing to invalidate new Federal Trade Commission regulations that aim to make it easier for people to terminate subscriptions to newspapers, gyms, retailers and other businesses.

The new lawsuit, which was filed Wednesday in the conservative 5th Circuit Court of Appeals, came one day after the Michigan Press Association and National Federation of Independent Business brought a similar case in the 6th Circuit.

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 companies that let people use an online platform to subscribe must also let people cancel online.

The groups said in their petition that the FTC abused its discretion by imposing “onerous new regulatory obligations” on companies that bill consumers on a recurring basis.

The IAB and NCTA were among the organizations that argued against the rules at a hearing in January.

Michael Powell, president and CEO of NCTA, specifically testified at the hearing that the rules were too broad.

“In many industries like ours, automatic renewals are the only model that make any sense,” Powell said, adding that the proposal “risks upending popular familiar services that consumers expect and enjoy.”

The IAB argued in comments filed with the FTC last year that the rules could affect companies that offer simple cancellation mechanisms, but “failed to make their cancellation mechanism symmetrical to their sign-up experience.”