{"id":726,"date":"2025-07-12T11:47:31","date_gmt":"2025-07-12T16:47:31","guid":{"rendered":"https:\/\/marcusboxerman.com\/blog\/?p=726"},"modified":"2025-07-12T11:52:05","modified_gmt":"2025-07-12T16:52:05","slug":"eighth-circuit-vacates-ftcs-click-to-cancel-rule-just-days-before-it-was-set-to-take-effect","status":"publish","type":"post","link":"https:\/\/marcusboxerman.com\/blog\/eighth-circuit-vacates-ftcs-click-to-cancel-rule-just-days-before-it-was-set-to-take-effect\/","title":{"rendered":"Eighth Circuit Vacates FTC\u2019s \u201cClick-to-Cancel\u201d Rule Just Days Before It Was Set to Take Effect"},"content":{"rendered":"

\"\"On July 8, 2025\u2014just days before it was set to take effect\u2014the Eighth Circuit Court of Appeals struck down the FTC\u2019s widely watched \u201cClick-to-Cancel\u201d Rule, formally known as the Negative Option Rule. The decision stopped the rule\u2019s implementation across the country, following a consolidated legal challenge from multiple circuits.<\/p>\n

The Click-to-Cancel Rule was aimed at businesses that offer subscription-based services with automatic renewals\u2014think gym memberships, streaming platforms, fitness apps, and meal delivery services. The core idea was simple: if a customer could sign up online with just a few clicks, they should be able to cancel just as easily. The rule would have required companies to provide a straightforward, online cancellation mechanism that matched the simplicity of the original sign-up process.<\/p>\n

But the court found that the FTC skipped a key procedural requirement in the rulemaking process. Specifically, the agency failed to issue a preliminary regulatory analysis after determining that the rule\u2019s compliance costs would exceed $100 million. That preliminary step, required by federal law, is meant to give the public a chance to weigh in on the rule\u2019s projected economic impact and any reasonable alternatives. Instead, the FTC waited until the final rule was published to provide that analysis\u2014too late for meaningful public input. As a result, the court vacated the rule in full.<\/p>\n

What Happens Next?<\/h3>\n

With the rule now vacated, the FTC has a few potential paths forward:<\/p>\n

    \n
  1. \n

    Appeal to the Supreme Court<\/strong> \u2013 The FTC could seek review from the U.S. Supreme Court. The agency has 90 days to file a petition for certiorari, with the possibility of an additional 60-day extension.<\/p>\n<\/li>\n

  2. \n

    Start Over<\/strong> \u2013 Alternatively, the FTC could restart the rulemaking process, this time including a proper preliminary analysis and public comment period. That would delay any new rule\u2019s implementation for many months.<\/p>\n<\/li>\n

  3. \n

    Abandon the Rule<\/strong> \u2013 The Commission might choose to walk away from the effort entirely, particularly since two current Commissioners had previously opposed it.<\/p>\n<\/li>\n<\/ol>\n

    What Does This Mean for Businesses?<\/h3>\n

    While the Click-to-Cancel Rule is off the table for now, businesses offering subscription services\u2014especially those with automatic renewals\u2014shouldn\u2019t breathe too easily. The FTC and state regulators still have tools to go after companies that make it too hard for consumers to cancel.<\/p>\n

    For instance, earlier this year, the FTC sued Uber, alleging that its cancellation process was unfair and confusing. That case was brought under the Restore Online Shoppers\u2019 Confidence Act (ROSCA), a federal law that applies to online sales involving automatic renewals or \u201cnegative option\u201d features. ROSCA requires companies to:<\/p>\n