Trump kills 'massively popular' rule shielding consumers from cancellation fees

Consumer advocates said Tuesday that the Trump administration is to blame for an appeals court decision that effectively killed the Federal Trade Commission's click-to-cancel rule, a Biden-era effort to stop companies from trapping consumers in subscriptions with onerous cancellation terms.

The U.S. Court of Appeals for the 8th Circuit vacated the rule entirely on procedural grounds on Tuesday, siding with the U.S. Chamber of Commerce and other corporate interests that claimed the FTC's process in crafting and finalizing the rule did not give industry sufficient "opportunity to assess" the agency's "cost-benefit analysis of alternatives."

After the rule was finalized last October, the FTC—then led by Lina Khan—said it had received more than 16,000 public comments on the proposal, which would have required companies to make it just as easy for consumers to cancel subscriptions as it was to enroll. The agency said the number of subscription-related public complaints rose to nearly 70 per day in 2024, indicating growing anger at companies' predatory tactics.

Khan wrote on social media Tuesday that public comments on the rule were "overwhelmingly" supportive and criticized the Trump FTC for giving industry groups time to block the effort. The rule was originally set to take effect on May 14, but the Trump FTC—now led by Republican Andrew Ferguson and two GOP commissioners—voted on May 9 to delay implementation, citing industry concerns that "it would take a substantial amount of time to come into compliance."

"The rule was set to go into effect in May but this FTC slow-walked it—and now a court has tossed it out, claiming industry didn't get enough of a say," Khan lamented.

Lee Hepner, senior legal counsel at the American Economic Liberties Project, said Tuesday that "the byzantine rulemaking process provides courts with infinite discretion to torpedo rules in service of deep-pocketed corporations and in spite of overwhelming public support."

"The commission received 16,000 public comments on its rule, yet the 8th Circuit has the temerity to suggest the commission failed to provide enough process to the Chamber of Commerce," Hepner added. "Congress gave the FTC the power to stop unfair and deceptive practices."

"If the FTC is serious about affordability for everyday Americans, it must reissue the rule immediately."

Mark Meador, one of just three commissioners left at the FTC following President Donald Trump's firing of the agency's two Democratic members earlier this year, declared following the appeals court decision that the click-to-cancel rule "isn't going into effect for one reason: The Biden FTC cut corners and didn't follow the law."

The American Prospect's David Dayen wrote in response that Meador, a commissioner "who has the ability to reissue the rule," is "more interested in cheering on judicial obstruction than simply saying he will reissue the rule."

Given that Ferguson and Republican FTC Commissioner Melissa Holyoak voted against finalizing the click-to-cancel rule last year, it is unlikely that they will support reviving the rule in the wake of the appeals court decision. Meador was not an FTC commissioner when the rule was finalized.

Nidhi Hegde, executive director of the American Economic Liberties Project, slammed the Trump FTC for delaying the rule's enforcement "long enough for big corporate lobbyists to win in court."

"It's bad enough that the Trump FTC has done nothing to bring down costs for the American people," Hegde said in a statement Tuesday. "Now, by slow-walking a simple, massively popular protection, they've ensured that hardworking people will keep getting stuck with subscriptions they don't want or can't afford from cable companies, gyms, and online services. If the FTC is serious about affordability for everyday Americans, it must reissue the rule immediately."