A U.S. federal appeals court has struck down the Federal Trade Commission’s “click-to-cancel” rule, killing a major consumer protection measure just days before it was set to take effect. The ruling is a significant victory for industry groups who argued the agency overstepped its authority.
Killed on a technicality: The Eighth Circuit court tossed the rule not on its merits, but on a procedural error. In its unanimous decision, the panel found the FTC failed to conduct a required cost-benefit analysis for regulations with an economic impact over $100 million, writing that the “procedural deficiencies… are fatal here.”
The political subtext: While the ruling cited procedure, the rule’s political fate was likely sealed anyway. The measure was a signature effort under former Democratic Chair Lina Khan, but the FTC is now led by a Republican majority whose members had previously dissented against the plan—a point the court made sure to highlight in its opinion.
The war isn’t over: The FTC’s fight against difficult cancellations continues on other fronts. The agency is still pursuing a major lawsuit against Amazon for its Prime subscription practices, and with no federal standard, the battle now shifts to the states, where a patchwork of at least 15 local “click-to-cancel” laws creates a new legal maze for companies.
Broader look: The federal push for a simple cancellation button is dead for now, but the fight over subscription traps is simply moving to state courts and individual company lawsuits. The FTC isn’t just focused on Amazon; the agency is also taking on Uber over its subscription practices. Meanwhile, some in the industry have argued that broad rules like this one could have harmed legitimate businesses, part of a larger trend where state officials are increasingly filling regulatory gaps left at the federal level.
