• by Wendy Davis , 5 hours ago

Two nonprofits have asked the Federal Trade Commission to reboot an effort to issue "click-to-cancel" rules that would enable consumers to easily terminate recurring subscriptions to newspapers, gyms and other businesses.

"The American public continues to need robust protection against unfair and deceptive 'subscription traps' -- the ubiquitous subscription practices that hook consumers into purchasing products or services with recurring charges and that are nearly impossible to cancel," the Consumer Federation of America and American Economic Liberties Project write in a petition posted last week on the FTC's website.

Last year, a divided FTC passed a broad set of click-to-cancel rules, but the 8th Circuit Court of Appeals struck them down for procedural reasons. Specifically, the appellate panel ruled that the FTC failed to conduct an in-depth economic analysis of the regulations' impact.

When the FTC approved the rules the vote was 3-2, with both Republicans -- including current FTC Chair Andrew Ferguson -- dissenting.

Those now vacated rules would have required 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, the requirements would have required businesses that accept subscriptions through online platforms to also allow people to cancel through an online platform.

The Interactive Advertising Bureau, Michigan Press Association, NCTA -- The Internet & Television Association, Chamber of Commerce and other business groups challenged the regulations in court, arguing both that they were too broad, and that the FTC hadn't followed all required procedural steps.

A three-judge panel of the 8th Circuit said in its ruling that the FTC's failure to conduct the required economic analyses deprived the Interactive Advertising Bureau and others of "a notable opportunity to dissuade the FTC" from moving forward with the rules.

The Consumer Federation of America and American Economic Liberties Project are now urging the agency to restart the rulemaking process by issuing the same proposed rules put forward in 2023, when it launched the initiative. 

The FTC is requesting input from the public on the nonprofits' petition, and will accept comments through January 2.