The Federal Trade Commission voted Friday to delay enforcement of the Negative Option Rule — known widely as the “click-to-cancel” rule requiring companies to make it as easy to cancel a subscription as it was to sign up.
The rule, which was first proposed in 2023, took aim at businesses selling physical and digital subscriptions — everything from streaming services to gym memberships — through simple signup flows, only to have customers discover later that they have to go through a much more complex or time-consuming process to cancel.
Under the Negative Option Rule, businesses would not be able to force customers to cancel subscriptions through a method different from the one they used to sign up — so if you signed up with a few clicks on a company’s website, you should be able cancel on their website, too. Companies are also required to provide relevant information about cancellation before they collect customers’ payment information.
According to the FTC, the rule went into effect on January 19, but enforcement of some provisions was delayed until May 14. Now the FTC is delaying enforcement by another 60 days, until July 14.
“Having conducted a fresh assessment of the burdens that forcing compliance by this date would impose, the Commission has determined that the original deferral period insufficiently accounted for the complexity of compliance,” the FTC said in a statement.
The commission voted 3-0 to delay enforcement. The FTC traditionally has five commissioners — three from the president’s party and two from the opposing party — but President Donald Trump fired the two Democratic commissioners in March. Those commissioners then sued Trump, arguing their firing violates a Supreme Court precedent that the president cannot fire FTC commissioners without cause.
Despite the delay, the FTC said it will indeed begin enforcement July 14, when “regulated entities must be in compliance.”
Techcrunch event
Berkeley, CA
|
June 5
BOOK NOW
“Of course, if that enforcement experience exposes problems with the Rule, the Commission is open to amending the Rule to address any such problems,” the FTC added.
