⚖️ Court blocks "click-to-cancel" rule

Appeals Court Halts FTC's Subscription Cancellation Rule

A federal appeals court has blocked the Federal Trade Commission’s upcoming “click-to-cancel” rule, which was set to take effect July 14. The regulation, championed by former FTC Chair Lina Khan, aimed to force companies to make cancelling a subscription as simple as signing up, particularly targeting confusing, multi-step cancellation flows that frustrate consumers.

Court Says FTC Skipped Key Economic Review

The 8th Circuit Court of Appeals ruled that the FTC failed to conduct a proper cost-benefit analysis before finalizing the rule, making it vulnerable to legal challenge. Critics of the rule had argued it would impose compliance burdens on businesses offering subscription services, while consumer advocates saw it as a necessary protection against deceptive “roach motel” tactics.

Expect Delays, Not Death

While the ruling delays implementation, the FTC may revise and reintroduce the rule with additional economic analysis. Companies relying on hard-to-exit subscription models should not get comfortable — state-level legislation (like California’s) and customer expectations are trending toward more frictionless cancellation anyway. Start simplifying your cancellation flows now or risk reputational and legal blowback later.

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