Trade Associations Challenge FTC’s Final Click-to-Cancel Rule

Multiple trade associations on Wednesday challenged in federal appeals courts the US Federal Trade Commission’s final “click-to-cancel” rule intended to help consumers more easily end subscriptions.

The Electronic Security Association, Interactive Advertising Bureau, and NCTA—The Internet & Television Association filed their petition for review Wednesday in the US Court of Appeals for the Fifth Circuit. The Chamber of Commerce for the United States and the Georgia Chamber of Commerce filed their challenge Tuesday in the US Court of Appeals for the Eleventh Circuit.

Both petitions call the FTC’s rule “an attempt to regulate consumer contracts for all companies in all industries and across all sectors of the economy” based on subscriptions irrespective of companies’ disclosures and say it creates “onerous” new regulatory obligations. The associations say the rule is arbitrary and are asking the appeals courts to vacate and enjoin the regulation. Both petitions estimate the rule will affect more than a billion paid subscriptions in the US.

The FTC announced the rule earlier this month and said it received more than 16,000 comments during the rulemaking process. The rule requires businesses to disclose the terms of signing up and include a simple way for people to withdraw from the offered program.

The agency receives thousands of complaints about recurring subscription practices every year and received an average of 70 consumer complaints per day in 2024, according to its press release announcing the rule.

The FTC declined to comment on the challenges.

The chambers of commerce are represented by the US Chamber Litigation Center and Gilbert Harrell Sumerford & Martin PC. ESA and the other trade associations are represented by Gibson Dunn & Crutcher LLP.

The cases are Chamber of Comm. of the US v. FTC, 11th Cir., No. 24-13436, petition for review filed 10/22/24 and Electronic Security Assoc. v. FTC, 5th Cir., No. 24-60542, petition for review filed 10/23/24.