Key points:
- A court vacated the FTC's Click-to-Cancel rule over failure to conduct a cost-benefit study.
- Democrats have introduced legislation to codify the rule into law.
- Proposed law would require easy cancellation and direct consent for auto-renewals.
Congressional Democrats are attempting to revive the Federal Trade Commission’s nullified “Click-to-Cancel” rule with new legislation introduced Wednesday in both chambers of Congress. The move follows a federal appeals court ruling earlier this month that invalidated the rule on procedural grounds.
The FTC’s rule was designed to combat subscription traps—business practices that make it easy to sign up for services but intentionally difficult to cancel. The rule would have required businesses to offer a simple cancellation mechanism, mirroring the process used to enroll. However, a federal court sided with cable industry challengers who argued that the agency failed to conduct a mandatory economic impact analysis before issuing the regulation. The rule was expected to affect over a billion paid subscriptions in the U.S.
With the FTC stymied, Representatives Brad Sherman (D-Calif.), Seth Magaziner (D-R.I.), and Chris Deluzio (D-Penn.) introduced the Click to Cancel Act to enshrine the canceled rule’s requirements into federal law. A Senate version of the bill was introduced by Senator Ruben Gallego (D-Ariz.).
“Subscriptions are Corporate America’s new favorite way to try and rip people off,” said Deluzio in a statement. “Canceling should be just as easy as signing up.” The bill mandates that companies provide “a simple, direct mechanism” to cancel subscriptions and prohibits auto-renewals without clear, affirmative consent from consumers.
John Breyault of the National Consumers League characterized the proposed law as “simple” and “commonsense,” asserting that its passage could be “the easiest vote” lawmakers take this year. However, the bill currently lacks Republican co-sponsors, and the original FTC rule was opposed by the Commission’s two Republican members.
Under the proposed legislation, violations would be classified as “unfair or deceptive acts or practices” under Section 5 of the FTC Act. Companies could face civil penalties of over $50,000 per violation if found to be deliberately obstructing subscription cancellations.
Despite the procedural setback in court, lawmakers are betting on broad public support to overcome partisan hurdles. Whether that support will translate into legislative momentum remains uncertain, but the bill’s success could reestablish the FTC’s authority to regulate digital consumer practices that are increasingly central to commercial life.
