Three industry groups are suing to prevent the Federal Trade Commission (FTC) from enforcing its new “Click to Cancel” rule that requires companies to make it easy to cancel subscriptions, according to Reuters. And yes, it’s exactly who you’d expect.
Click to cancel expands the Negative Option Rule to forbid businesses from making customers cancel services using a method that differs from how they signed up. So, if you sign up online, you must be allowed to cancel online, rather than needing to call a support line, write a letter, or show up in person. Most aspects of the rule, assuming it isn’t blocked, will go into effect 180 days from its entry into the Federal Register.
That’s “arbitrary, capricious, and an abuse of discretion,” the Internet and Television Association, Electronic Security Association, and Interactive Advertising Bureau allege in their complaint filed with the US Fifth Circuit Appeals Court today. The groups — many of whose member companies profit from subscriptions that are easy to start and harder to stop — argue that the FTC is trying to “regulate consumer contracts for all companies in all industries and across all sectors of the economy.”
Indeed, the rule applies to any automatically renewing subscription, whether it’s a gym membership or Amazon Prime, including free trials or those plans that ship you easy-to-cook dinners. The horror!
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