Appeals court blocks FTC's click-to-cancel rule over procedural errors

On July 8, 2025, the U.S. Court of Appeals for the Eighth Circuit ruled against the Federal Trade Commission's (FTC) click-to-cancel rule, which aimed to simplify the process for consumers wishing to cancel subscriptions. This ruling came just days before the rule was scheduled to take effect on July 14, highlighting procedural issues the FTC faced during the rule-making process. The court found that the FTC had failed to conduct a preliminary regulatory analysis as required under the law, specifically when the annual economic impact was projected to exceed $100 million. The click-to-cancel rule, initially proposed in March 2023 and formally announced in October 2024, was intended to require businesses to make cancelling subscriptions as simple as subscribing. According to the FTC, the rule emerged from widespread consumer frustration, exemplified by the nearly 16,000 public comments received, many of which detailed difficulties individuals experienced when attempting to navigate cancellation processes of various services. The rule received significant opposition from industry groups, which argued it was overly broad and could impose burdensome compliance costs. These groups included the Electronic Security Association, the Interactive Advertising Bureau, and the Internet and Television Association. They contended that the FTC's rule-making was arbitrary and did not allow for adequate input from the industry before challenges were made in October 2024. In its ruling, the appeals court emphasized the importance of following proper procedural guidelines. It concluded that the rule's flaws were severe enough to warrant its complete vacatur. Some former FTC officials, like Lina Khan, who was in charge during the proposal’s development, criticized the delays attributed to the previous Trump administration. Meanwhile, current FTC Commissioner Mark Meador blamed the Biden administration for not adhering to legal processes, suggesting a lack of consideration for established procedures in regulatory practices. The ruling reflects ongoing tensions between regulatory bodies and the industries they oversee, with broader implications for how businesses manage subscription services going forward.