Bill aimed at eliminating subscription traps in digital services, proposes 'Click-to-Cancel' system as replacement for a rule previously annulled by the court
The Click-to-Cancel Act, a proposed legislation aimed at simplifying the cancellation process for subscription services, has been a topic of discussion for quite some time. The Act, which was vacated by the U.S. Court of Appeals for the Eighth Circuit just days before its effective date in July 2025, was designed to combat unfair practices such as automatic renewals and free trial-to-paid conversions [1][2][4].
The vacatur of the Act has left consumers vulnerable to complex and frustrating cancellation processes, often involving long hold times, hidden links, and misleading prompts [1][2][4]. However, the fight for consumer protection continues.
The Click-to-Cancel Act, originally promulgated by the Federal Trade Commission (FTC), aimed to strengthen consumer protections by prohibiting misleading marketing, requiring clear disclosures, and mandating express consumer consent for automatic renewals [1][2][4]. The current FTC, controlled by a Republican majority, is unlikely to appeal or reissue the rule as vacated [2].
Despite the setback, the Act is expected to gain momentum as lawmakers focus on tech accountability and consumer protection in the 2026 election cycle. The bill is expected to draw support from consumer rights organizations and regulatory advocates, while business groups may resist due to concerns about compliance costs and limitations on marketing tactics [1].
Some current FTC Commissioners dissented on procedural grounds when approving the original rule but affirm the importance of clear disclosure and consent principles, which remain broadly bipartisan [3]. The Eighth Circuit, in vacating the rule, positioned itself against the broad scope and regulatory approach taken by the FTC, emphasizing procedural shortcomings [1][2][4].
In the absence of the federal rule, states' attorneys general are expected to bolster enforcement of subscription and auto-renewal practices independently [2]. This shift towards state-level regulation indicates a continued commitment to consumer protection.
The issue affects a wide range of industries, including gyms, streaming services, apps, e-commerce platforms, and more. Companies profit from these tactics, which are based on user forgetfulness and frustration [1]. However, businesses should maintain transparent, consumer-friendly subscription practices to mitigate regulatory risk [2][3].
In conclusion, while the Click-to-Cancel rule is currently unenforceable, consumer protection efforts continue through the FTC’s Section 5 authority and increased state-level regulation. As the 2026 election cycle approaches, it remains to be seen how the Click-to-Cancel Act will progress and what impact it will have on consumer rights and business practices.
[1] - Source 1 [2] - Source 2 [3] - Source 3 [4] - Source 4
- The ongoing discussions and efforts surrounding the Click-to-Cancel Act, a piece of policy-and-legislation meant to streamline cancellation processes for subscription services, are a significant aspect of general-news, given its potential impact on consumer rights and business practices.
- The vacatur of the Click-to-Cancel Act has moved the focus of consumer protection efforts to state-level regulations, as attorneys general are expected to bolster enforcement of subscription and auto-renewal practices independently, which is a notable development in politics and general-news.
