TECHNOLOGY

The End of Easy Cancellations: What Happened?

USAWed Jul 09 2025

A recent decision by a federal appeals court has put an end to a rule that would have made it easier for people to cancel their subscriptions.

The FTC Rule and Its Purpose

  • The rule, created by the Federal Trade Commission (FTC), was set to start next week.
  • It required companies to let customers cancel subscriptions as easily as they signed up.
  • This included gym memberships, Amazon Prime, and other services.

Industry Challenge and Court Decision

  • Industry groups representing companies like cable providers, entertainment studios, and home security firms challenged the rule.
  • They argued that the FTC was overstepping by trying to regulate all consumer contracts across different industries.
  • The court agreed, stating that the FTC made significant mistakes in how it created the rule.

Court's Findings

  • The FTC skipped important steps in the process, such as giving stakeholders enough time to provide feedback.
  • While the court acknowledged that the FTC's intentions were not bad, the mistakes were serious enough to invalidate the entire rule.
  • The court also noted that the rule's future looks uncertain, especially since the Democratic members who supported it are no longer at the FTC.

Consumer Protection vs. Business Interests

  • This decision highlights the ongoing tension between consumer protection and business interests.
  • While the rule aimed to make it easier for consumers to cancel unwanted subscriptions, the court's decision shows the challenges of implementing such regulations.
  • It also raises questions about the balance between protecting consumers and allowing businesses to operate freely.

questions

    Will consumers now have to perform a ritual dance to cancel their subscriptions?
    How might this ruling affect the FTC's future regulatory efforts?
    How might this ruling affect the FTC's approach to future rulemaking processes?

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