Photo Credit: Shutter Speed
A federal appeals court has blocked a “click-to-cancel” rule, which would have required businesses to make it easy to cancel subscriptions.
Just days before it was due to go into effect, a “click-to-cancel” rule that would have required businesses to make it easy for users to cancel subscriptions has been blocked by a federal appeals court.
The Federal Trade Commission’s proposed changes were adopted back in October, requiring businesses to obtain a customer’s consent before charging for memberships, auto-renewals, and programs linked to free trial offers.
At the time, the FTC said businesses must also disclose when free trials or other promotional offers will end. They also required allowing customers to cancel recurring subscriptions as easy as they were started.
The prior Biden administration included the FTC’s proposal as part of its “Time is Money” initiative, announced last year with the goal of “cracking down” on consumer-related struggles. The rule was set to go into effect on Monday—but the U.S. Court of Appeals for the Eighth Circuit said this week that wouldn’t be happening.
According to the court, the FTC made a procedural error by failing to provide with a preliminary regulatory analysis, which is required for any rule with an annual economic impact of over $100 million. As a result, the court opted to toss out the rule.
“While we certainly do not endorse the use of unfair and deceptive practices in negative option marketing, the procedural deficiencies of the Commission’s rule-making process are fatal here,” wrote the court.
Meanwhile, the FTC is gearing up for a trial involving Amazon’s Prime program. That proceeding stems from a lawsuit filed by the agency that accused Amazon of enrolling users in its Prime program without their consent and making it difficult for them to cancel afterward. The trial is expected to start next year.
Music Apps, Music Industry News, Music Streaming, Pop Culture
This post was originally authored and published by Ashley King Digital Music News via RSS Feed. Join today to get your news feed on Nationwide Report®.
