The FTC Continues to Crack Down on Deceptive Subscriptions (Rulemaking or Not)
In October, our colleague Holly Melton read the tea leaves and wrote that the FTC might take steps to revive the "Click-to-Cancel" Rule (the Rule). Holly’s reading was spot on – the FTC kicked off the first step in what might be an effort to revive the Rule earlier this month. Specifically, the FTC requested comments (due by January 2nd) about whether to reopen the Rule. The backstory follows. However, regardless of the Rule’s fate, the FTC continues to aggressively enforce against deceptive subscription practices under other authority, including the Restore Online Shopper’s Confidence Act (ROSCA) and FTC Act.
- A flurry of enforcement: In just the past few months, the FTC secured a “historic” $2.5 billion settlement with Amazon.com regarding Prime subscription practices, a $7.5 million settlement with Chegg regarding its alleged failure to provide a simple cancellation mechanism, and a $14 million settlement with the owners of Match.com regarding its cancellation process, and the Agency has ongoing enforcement actions against (and investigations into) other brands’ subscription practices too. This aggressive enforcement has continued despite the Eighth Circuit’s decision to vacate the Rule in July.
- The FTC receives a petition to revive the Rule: In late November, the FTC received a petition from the Consumer Federation of America (CFA) and American Economic Liberties Project (AELP) asking the FTC to reopen rulemaking on the Rule. The FTC responded by publishing the petition from CFA and AELP and requesting public comments about whether to reopen the Rule. In doing so, the FTC wrote that it “will not consider the petition’s merits until after the comment period closes.”
- To revive or not to revive: It remains to be seen whether the FTC will take further steps to revive the Rule. Current FTC Commission Chairman Andrew Ferguson previously dissented from the Rule when it was finalized under the Biden Administration. However, as Holly wrote, there have been other signs that the FTC values the now-vacated Rule. For example, the FTC defended the Rule before the Eighth Circuit, and Commissioner Mark R. Meador expressed disappointment during the National Advertising Division’s annual conference in September that the Rule had been vacated.
Ultimately, we know that the FTC will continue to use its existing authority and other tools at its disposal to challenge deceptive subscription practices, and state regulators and class action plaintiffs are actively pursuing these practices too. So what should marketers do as we head into the new year? Conduct a compliance “health check” on subscription practices, and stay current with changing enforcement trends and laws in this area. And, if you’re so inclined, submit comments to the FTC about the “Click-to-Cancel” Rule by January 2, 2026, perhaps while sipping on your favorite holiday beverage.
