FTC Finalizes 'Click-to-Cancel' Regulation for Subscriptions

WASHINGTON—The Federal Trade Commission (FTC) has announced the final "click-to-cancel" negative option regulation covering online subscription services, according to reports. The FTC published the final rule to the Federal Register with the majority of the rule's provisions entering force 180 days after it is published to the public. The "click-to-cancel" regulation requires sellers to make it easy for consumers to cancel their enrollment in online memberships, such as an adult membership site. “Too often, businesses make people jump through endless hoops just to cancel a subscription,” said Lina M. Khan, chair of the FTC. “The FTC’s rule will end these tricks and traps, saving Americans time and money. Nobody should be stuck paying for a service they no longer want.” FTC as an agency is led by a commission made up of five members. Right now, the commission is led by a simple majority of 3-2 of Democratic-leaning commissioners.   Corey Silverstein, an adult industry attorney, explained to AVN that the adoption of the final "click-to-cancel" regulation in the weeks leading up to the 2024 election was a purely political move that could harm industries beyond adult entertainment.   "Since yesterday’s announcement, my office has already received over a dozen calls from concerned adult entertainment businesses that are now seeking to have their billing and cancellation pages reviewed before the implementation of this ... rule, that for the most part will take effect in 180 days from yesterday," Silverstein said.    He added, "The FTC has already singled out the cancellation processes of major players like Amazon and Adobe and I have no doubt that the FTC will quickly weaponize the 'click-to-cancel' rule on smaller businesses, assuming that the current U.S. and FTC administrations remain the same following the upcoming elections."   Silverstein also said that he focused on the dissenting opinions of commissioners who voted against the adoption of the measure. He referred specifically to Commissioner Melissa Holyoak, one of the two Republicans on the commission.   "I believe the commission is at its best when it focuses on enforcing the law, not writing it," Holyoak said in her dissenting opinion on the rule. "[I] am not reflexively opposed to rulemaking where Congress has delegated the commission relevant authority, and we act consistent with that authority."   Holyoak said the commission's rulemaking on "click-to-cancel" overlooks that authority granted by Congress.   "Instead, we have an ill-disguised political maneuver from the Majority in the form of a rule, one rushed to publication to advance the prospects of the Chair’s preferred presidential candidate," said Holyoak. "I dissent."   Click-to-cancel regulations and legislation are popular among public interest and consumer rights groups. Recently, the state of California adopted Assembly Bill (AB) 2863. In September, Gov. Gavin Newsom signed AB 2863 into law, clamping down on auto-renewing subscription services in the digital space of the country's most populated state. This law requires companies offering automatic renewals and continuous services to provide customers with an easier way to cancel subscriptions in the same way. According to Newsom's office, this ensures that customers can easily exit services without being trapped in a confusing process to cancel or face hidden fees.