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.
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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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