FTC delays enforcement of click-to-cancel rule

The Federal Trade Commission voted Friday to hold enforcement of the Negative Option Rule — known wide arsenic the “click-to-cancel” regularisation requiring that companies marque it arsenic casual to cancel a subscription arsenic it was to motion up.

The rule, which was first announced successful 2023, took purpose astatine businesses selling carnal and integer goods — everything from streaming subscriptions to gym memberships — with elemental signup flows, lone to person customers observe aboriginal that they person to spell done a overmuch much analyzable oregon time-consuming process to cancel.

Under the Negative Enforcement Rule, businesses would not beryllium capable to unit customers to cancel subscriptions done a method antithetic from the 1 they utilized to motion up — truthful if you signed up with a fewer clicks connected a company’s website, you should beryllium capable cancel connected their website, too. Companies are besides required to supply applicable accusation astir cancellation earlier they cod customers’ outgo information.

According to the FTC, the regularisation went into effect connected January 19, but enforcement of immoderate provisions was delayed until May 14. Now the FTC is delaying enforcement by different 60 days, until July 14.

“Having conducted a caller appraisal of the burdens that forcing compliance by this day would impose, the Commission has determined that the archetypal deferral play insufficiently accounted for the complexity of compliance,” the FTC said successful a statement.

The committee voted 3-0 to hold enforcement. The FTC traditionally has 5 commissioners — 3 from the president’s enactment and 2 from the opposing enactment — but President Donald Trump fired the 2 Democratic commissioners successful March. Those commissioners past sued Trump, arguing their firing interruption a Supreme Court precedent that the president cannot occurrence FTC commissioners without cause.

Despite the delay, the FTC said it volition so statesman enforcement July 14, erstwhile “regulated entities indispensable beryllium successful compliance.”

“Of course, if that enforcement acquisition exposes problems with the Rule, the Commission is unfastened to amending the Rule to code immoderate specified problems,” the FTC added.