FTC’s “Click-to-Cancel” Rule Blocked by Appeals Court

On July 8, 2025, the U.S. Court of Appeals for the Eighth Circuit vacated the Federal Trade Commission’s (FTC) “click-to-cancel” rule, which was set to take effect on July 14. The rule aimed to simplify the process of canceling subscriptions, requiring that cancellation methods be as straightforward as sign-up procedures. However, the court found that the FTC failed to follow proper rulemaking procedures, specifically neglecting to conduct a preliminary cost-benefit analysis, rendering the rule invalid.

Background of the rule

The “click-to-cancel” rule was designed to address negative option marketing practices, where businesses interpret a customer's inaction as consent to continue a subscription. The rule mandated that companies provide cancellation options that are at least as easy to use as the methods for signing up. It also sought to prevent companies from requiring consumers to navigate through chatbots or speak to agents to cancel services initiated online.

Legal challenges and court decision

The rule faced opposition from various industry groups, including the U.S. Chamber of Commerce and trade associations representing major companies such as Comcast, Charter Communications, Disney Entertainment, and Warner Bros. Discovery. These groups argued that the FTC overstepped its authority and failed to provide sufficient evidence to justify the rule. 

The Eighth Circuit Court agreed, stating that the FTC's procedural deficiencies during the rule-making process were significant enough to vacate the entire rule.

Implications for businesses and consumers

The court's decision is a significant win for businesses that challenged the FTC's authority. For consumers, it means that the anticipated simplification of subscription cancellations will not take effect as planned. The FTC, which has been receiving an increasing number of complaints about subscription practices—nearly 70 per day in 2024, up from 42 in 2021—may need to restart its regulatory process to address these concerns.

Next steps

With the rule vacated, the FTC may consider revising and reintroducing the regulation, ensuring compliance with the necessary procedural requirements. In the meantime, businesses should stay informed about potential future developments and consider evaluating their subscription cancellation processes to align with best practices and consumer expectations.

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