The Association of National Advertisers is urging the Federal Trade Commission to refrain from re-issuing key components of the 2024 click-to-cancel rules, which aimed to make it
easier for consumers to terminate recurring subscriptions for cable television, gyms, newspapers and other products and services.
Among other terms, the former rules would have
required companies to offer simple cancellation mechanisms, and allow consumers to cancel subscriptions through the same medium that was used to purchase them. In practice, those provisions would have
required businesses that accept subscriptions through online platforms to also allow people to cancel through an online platform.
A federal appellate court struck down the
regulations last year, ruling that the agency failed to conduct a detailed economic analysis of the potential impact of regulations before passing them.
The FTC said last month
that it would consider whether to revive all or parts of those former rules, and sought input from the public about the subject.
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On Monday, the advertising organization argued
against reimposing a requirement that businesses offer cancellation mechanisms that are "at least as easy to use" as the sign-up mechanisms.
"This standard would have ignored
that the sign-up and cancellation processes are inherently different and that, accordingly, consumers may approach such processes differently," the Association of National Advertisers writes. "For instance, although consumers may prefer a one-click sign-up process that allows them to quickly access a desired product
or services, there may be consequences that a consumer would like to consider during cancellation."
The ad group also says cancellation "could have unintended consequences,
such as unsubscribing the consumer from bundled services or higher rates after cancellation, that the consumer would have preferred to consider before moving forward with the cancellation."
The organization adds that the phrase "easy to use" phrase is too vague.
"For instance, one consumer that is more familiar with the platform or cancellation
medium is likely to find that cancellation method 'easier' than a consumer who is less familiar," the group argues.
The advertisers organization additionally questioned whether new regulations
are needed at all, noting that The Wall Street Journalreported in 2024 that
"up to 25 percent" of streaming subscribers cancelled at least three services in the two previous years.
When the FTC approved the former rules, the vote was 3-2, with both
Republicans then on the commission, including current chair Andrew Ferguson, voting against passage.
Business groups including the Interactive Advertising Bureau, Michigan
Press Association, NCTA -- The Internet & Television Association and Chamber of Commerce challenged those rules in court, arguing that they were too broad and that the agency failed to follow all
procedural requirements before promulgating them.
A three-judge panel of the 8th Circuit agreed, writing, "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 judges said the FTC should have issued a "preliminary
regulatory analysis" including "a description of reasonable alternatives to the proposed rule, a cost-benefit analysis of each alternative, and an assessment of the effectiveness of the proposed rule
and each alternative in achieving the Commission’s stated objectives in promulgating the rule."
Earlier this year, consumer advocates, including the Electronic Privacy
Information Center and National Consumer Law Center, urged the FTC to revive the 2024 regulations.
"In general, businesses with subscription models have shown little interest
in making cancellation processes easy for consumers," the groups write. "That lack of voluntary action militates for clearer, enforceable laws."
The FTC said in March that in
the last five years, it's received more than 100,000 complaints about practices involving so-called "negative options" -- such as automatically charging consumers for a product or service every month,
unless they affirmatively terminate their subscriptions.
"The rate of these complaints has steadily risen from at least 33 per day in late 2020 to more than 90 per day in
2025," the FTC wrote in March, adding that the complaints come from every state and involve "hundreds" of companies.
"Negative option offers, which have become more widespread
in recent years, can provide substantial benefits for sellers and consumers in the marketplace," the commission said last month. "However, consumers cannot reap such benefits when sellers fail to make
adequate disclosures, charge consumers without their consent, or make cancellation difficult or impossible."