• by Wendy Davis , December 5, 2024

The Interactive Advertising Bureau, cable industry lobbyists and others Thursday asked a federal appellate court to block the Federal Trade Commission's new click-to-cancel rules, which aim to make it easier for consumers to end subscriptions to newspapers, gyms, retailers and other businesses.

Those rules, passed earlier this year, require companies to offer subscribers a simple cancellation mechanism, and let consumers cancel subscriptions through the same medium that was used to purchase them. In practice, those requirements mean that companies that let people use an online platform to subscribe must also let people cancel online. The regulations are slated to take effect next year.

The Interactive Advertising Bureau, NCTA -- The Internet & Television Association, Michigan Press Association, Chamber of Commerce and other groups argue in papers filed with the 8th Circuit Court of Appeals that the FTC lacked authority to issue the rules.

The organizations also say their members will have to incur “significant” costs to comply with the rules, if they are allowed to take effect.

“Petitioners will need to redesign sales materials, websites, apps, customer intake and cancellation procedures, and more, losing customer goodwill in the process,” the groups write.

They add that the click-to-cancel rules “will backfire in many cases.”

“Customers might inadvertently click to cancel their home security, telephone, internet, or other critical services -- or third parties, without authorization to cancel, might do so,” the challengers argue. “These customers will blame companies, not the Commission.”

The FTC approved the regulations by a 3-2 vote, with Republican commissioners Melissa Holyoak and Andrew Ferguson voting against them.

The agency first proposed the rules in March 2023, stating that they “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 Interactive Advertising Bureau, Association of National Advertisers and numerous other business groups opposed the proposal.

“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 with the FTC in June 2023.