FTC’s click-to-cancel rule has been struck down by federal judges at the eleventh hour

In 2024, the FTC was set to implement the “click to cancel” rule, which would have placed requirements on companies to be forthright about the terms and conditions and exit options for their subscriptions. Since that time, the agency has become a less independent part of the executive branch and in May, it delayed enforcing some parts of this rule to July 14. Today, the entire plan appears to be dead in the water after judges in the US Eighth Circuit Court of Appeals decided to vacate the rule.

The “click to cancel” rule, which was officially named the Negative Option Rule, drew appeals from industry associations and individual businesses. These parties argued the FTC had failed to follow correct procedures and conduct an analysis before issuing the rule. The judge panel has agreed with them.

“While we certainly do not endorse the use of unfair and deceptive practices in negative option marketing, the procedural deficiencies of the Commission’s rulemaking process are fatal here,” the ruling reads. “Vacatur of the entire Rule is appropriate in this case because of the prejudice suffered by Petitioners as a result of the Commission’s procedural error.”

The judges may not endorse those actions, but it looks like for the foreseeable future, businesses will be able to keep taking them without consequences.