• by Wendy Davis , January 20, 2025

A federal appellate panel on Friday rejected a request by the Interactive Advertising Bureau and others to block the Federal Trade Commission's new click-to-cancel regulations, which aim to enable consumers to easily cancel recurring subscriptions to newspapers, gyms, retailers and other businesses

The 8th Circuit Court of Appeals didn't give a reason for the 2-1 decision. Circuit Judges Jane Kelly (an Obama appointee) and Ralph R. Erickson (appointed by Trump) voted to allow the regulations to take effect, while Judge Steven Grasz (also a Trump appointee) would have blocked them.

The new regulations include requirements that companies offer simple cancellation mechanisms, 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 Interactive Advertising Bureau, Chamber of Commerce, Michigan Press Association,  NCTA -- The Internet & Television Association and other business groups sued to invalidate the rules, arguing that the FTC lacked authority to issue them.

The organizations also sought a preliminary injunction blocking the rules from taking effect while the lawsuit is pending, arguing that businesses will face “irreparable harm” if required to comply with the new regulations.

“There's a mountain of evidence -- fourteen sworn declarations from a wide variety of businesses about how they each operate and how complying with the rule will cause lost goodwill and other harms,” the groups argued in papers filed earlier this month with the 8th Circuit.

For instance, Aaron Velthoven, vice president for marketing and events for Detroit Free Press, said in a court declaration that the newspaper will have to “devote time and resources to implement the simple cancellation mechanism,” and “redo contract templates, and revise employee training and scripts for its customer service representatives.”

He added that the requirement to allow cancellation through the same medium as signups “will require the Detroit Free Press to incur expenses to ensure not just that there are internet options for anyone who subscribed online, but also phone, mail, and even in-person options if there are customers who used any of these alternative means of signup.”

The appellate court could still block the rules in the future. The IAB and other groups are expected to make additional arguments to the court by February 14.