An industry group, representing Comcast, Disney, and Warner Bros. Discovery, is challenging the Federal Trade Commission’s (FTC) new rule that requires subscription cancellations to be as simple as signing up. Filed in the U.S. Court of Appeals for the Fifth Circuit, the lawsuit argues that the rule places unreasonable burdens on businesses.
The case was filed in the conservative-leaning Fifth Circuit, which has a history of ruling against regulatory overreach. This move signals the industry’s hope for a favorable ruling in a court where 12 of the 17 judges were appointed by Republican presidents, including six by former President Donald Trump.
The FTC introduced the “click-to-cancel” provision to address deceptive practices that make unsubscribing from services difficult, aiming to protect consumers from so-called “dark patterns” in subscription models. The FTC emphasized that the rule targets companies that trap customers in recurring payments through complex and confusing cancellation procedures.
The rule, introduced as part of the FTC’s amendment to its longstanding Negative Option Rule, requires companies to offer clear and easy cancellation methods to customers. Businesses that fail to comply face hefty penalties, a prospect that has sparked the lawsuit, with corporations arguing that implementing these changes could disrupt their business models and lead to increased operational costs.
For consumers, the outcome of this legal battle is significant, as it could determine how easy or difficult it will be to cancel subscription services moving forward. The FTC, in its defense, has pointed to widespread consumer frustration over the difficulty in ending services, particularly with companies that rely heavily on automated or hidden renewal schemes.
For now, the rule remains in place, providing consumers with easier cancellation methods as the legal proceedings unfold.
This case is just one part of a broader trend in which corporate America is pushing back against the FTC’s more aggressive regulatory stance under Khan’s leadership, a dynamic that could reshape consumer protections in the digital economy.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
