Three industry groups, the NCTA, the Electronic Security Association (ESA), and the Interactive Advertising Bureau (IAB), are suing to prevent the Federal Trade Commission (FTC) from enforcing its new “Click to Cancel” rule that requires companies to make it easy to cancel subscriptions. Their complaint (included below) alleges the rule is “arbitrary, capricious, and an abuse of discretion,” as reported previously by Reuters.
Under click to cancel, if you sign up online, you must be allowed to cancel online rather than needing to call a support line, write a letter, or show up in person. Most aspects of this expansion of the Negative Option Rule will go into effect 180 days from its entry into the Federal Register, assuming it isn’t blocked.
And yes, the groups opposing it represent exactly the names you’d expect, with member companies who profit from subscriptions that are easy to start and harder to stop.
The NCTA - Internet and Television Association represents service providers like Comcast, Charter, and Cox and entertainment studios like Disney, AMC, Paramount, and Warner Bros. Discovery. The IAB’s 700 members include almost any company connected to advertising, with Google, Netflix, Amazon, Meta, Vizio, and the NFL among its board members, while the ESA covers home security giants like ADT.
The groups’ lawyers argue that the FTC is trying to “regulate consumer contracts for all companies in all industries and across all sectors of the economy” by attempting to forbid businesses from making customers cancel services using a method that differs from how they signed up.
Recent Supreme Court decisions like overturning Chevron deference and a 2022 decision strengthening the “major questions” doctrine have stripped authority from regulators to tackle issues that legislators have yet to cover. Meanwhile, well-funded industries can roadblock consumer and environmental protections with lobbying and lawsuits like this.
Disclosure: Comcast is an investor in Vox Media, The Verge’s parent company.
Correction, October 24th: An earlier version of this article misstated the name of one of the industry groups, it is NCTA - Internet and Television Association, not Internet and Television Association. The article has been updated to clarify the members of the associations.
