Consumer watchdogs as well as a group of prominent law professors are urging an appellate court to uphold the Federal Trade Commission's click-to-cancel rules that aim to enable consumers to easily terminate recurring subscriptions to newspapers, gyms, and other businesses.
The rules are a “logical, appropriate, and necessary response to the deluge of unwanted subscriptions that plague consumers all across the marketplace,” the group Truth in Advertising argues in a friend-of-the-court brief filed with the 8th Circuit Court of Appeals.
The organization is urging the 8th Circuit to reject a challenge to the rules by the Interactive Advertising Bureau, Michigan Press Association, NCTA -- The Internet & Television Association, Chamber of Commerce and other business groups.
They argued in a brief filed earlier this year that the rules are too broad because they affect numerous industries.
Among other mandates, the FTC's click-to-cancel 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. The rules also provide that cancellation mechanisms must be “at least as easy to use” as the sign-up mechanisms.
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In practice, the rules require businesses that accept subscriptions through online platforms to also allow people to cancel through an online platform.
The regulations were passed last October in a 3-2 vote. The FTC recently defended the rules to the 8th Circuit, even though both Republicans on the commission, including current chair Andrew Ferguson, voted against passage.
Truth in Advertising argues in its brief that the FTC's rules give consumers “much-needed protection” from problematic business practices.
“The data make clear that far too many companies are manipulating consumers with deceptive and misleading subscription offers and, as a result, Americans are spending 'billions of dollars on stuff they have forgotten about,'” the organization writes, quoting from a January 2024 Wall Street Journal article about the “subscription economy.”
Eleven law professors, including Columbia Law School's Tim Wu, best known for coining the phrase “net neutrality,” argue in a separate friend-of-the-court brief that the FTC's regulations could end up boosting companies that offer subscriptions.
“For the subscription-wary public, clear information and cancellation processes can help consumers feel more willing to try subscription services, to the benefit of businesses,” the academics contend.
Earlier this year, a three-judge panel of the 8th Circuit rejected a request by the Interactive Advertising Bureau and others to temporarily block enforcement of the rules. That ruling was only preliminary, and the court could still strike down the rules after considering new arguments.