A federal appeals court has blocked the FTC's "click-to-cancel" rule just days before its implementation, which aimed to ease subscription cancellations. The rule mandated businesses to obtain customer consent before charging for memberships, disclose the end of free trials, and ensure cancellation was as easy as sign-up. The court ruled that the FTC failed to conduct a required preliminary regulatory analysis, determining the rule's economic impact exceeded $100 million. The ruling pointed out procedural errors as the reason for vacating the rule, despite acknowledging the issue of unfair marketing practices.
"While we certainly do not endorse the use of unfair and deceptive practices in negative option marketing, the procedural deficiencies of the Commission's rulemaking process are fatal here."
"The FTC said at the time that businesses must also disclose when free trials or other promotional offers will end and let customers cancel recurring subscriptions as easily as they started them."
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