Federal Appeals Court Vacates FTC 'Click to Cancel' Rule Pending Review

Federal Appeals Court Vacates FTC 'Click to Cancel' Rule Pending Review

ST. LOUIS — The U.S. Court of Appeals for the 8th Circuit on Tuesday vacated the Federal Trade Commission’s “click-to-cancel” rule aimed at making it easier for consumers to cancel online subscriptions, pending further review.

Critics contend that the rule exceeds the FTC’s authority and that its imposition skirted procedural rules. In the 8th Circuit’s decision, a three-judge panel concluded that the FTC failed to follow procedural requirements under the Federal Trade Commission Act. Tuesday's decision temporarily blocks enforcement of the rule, which was scheduled to take effect July 14.

As XBIZ reported last year, at issue are the FTC’s updates to the Negative Option Rule, originally adopted in the 1970s to protect consumers from being automatically enrolled in subscription plans without their consent. Under the updates, the rule would apply to almost all negative option programs, meaning any that “contain a term or condition that allows a seller to interpret a customer’s silence, or failure to take an affirmative action, as acceptance of an offer,” including automatic renewal and free-to-pay offers.

The FTC announced its proposed changes in March 2023. In response, the commission received more than 16,000 comments from consumers, government agencies, consumer groups and trade associations.

At the time, industry attorney Corey D. Silverstein cautioned website operators that while the proposed amendments would make it much easier for consumers to cancel unwanted subscriptions and would help protect them from deceptive practices, it could also potentially cause “major headaches for website operators” due to requiring substantial changes to sign-up and cancellation practices.

Silverstein provided a detailed breakdown of the rule for XBIZ readers earlier this year.

The case before the 8th Circuit consolidated multiple petitions for review brought by an array of businesses and trade associations in four federal circuit courts.

Although the court’s decision means that the rule’s provisions will not take effect pending further review, many operators that sell subscriptions already abide by similar rules, especially since both Visa and Mastercard regulations specify disclosure and consent requirements for negative options. There are also other existing relevant federal and state regulations. The Restore Online Shoppers Confidence Act, enacted by Congress in 2010, has been enforced against adult businesses, and in September 2024, California enacted a law significantly tightening rules regarding automatic renewal of paid website subscriptions.

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

French Telecoms Mogul Ignites AV Firestorm With Free VPN, Sarcastic Tweet

French billionaire Xavier Niel, founder of telecommunications giant Iliad S.A., ignited a heated debate this week when he appeared to admit that the no-cost VPN his Free Mobile wireless carrier has integrated into its service was deliberately designed to circumvent age verification restrictions and allow customers to access adult content.

UPDATED: Michigan Legislators Propose Online Porn Ban

Michigan lawmakers have introduced a bill that would make it illegal to distribute pornography via the internet in the state.

Taliban Restricts Access to Adult Content by Shutting Down Internet

The Taliban has shut down internet access across a large portion of Afghanistan in a move to prevent what it deems "immoral activities."

Go.cam Launches Video Spoofing Protection

Go.cam has announced that its verification solution now features security against video spoofing.

SexLikeReal Releases 'VR Self-Care' Guide

SexLikeReal (SLR) has published a blog post spotlighting “VR Self-Care.”

Brady Mills Agency to Launch 'AgeWallet' Subscription AV Solution

Tech company Brady Mills Agency announced that its subscription-based merchant age verification solution, AgeWallet, will launch in November.

EU Advocate General: France Can Require Foreign Sites to Implement AV

An advocate general of the European Union’s Court of Justice on Thursday advised the court to rule that France may require pornographic websites based in other EU states to implement age verification in accordance with French law.

Hentaied Founder Romero 'Mr. Alien' on Fetish, Fantasy and Finding Order in Chaos

A sharp sting pierces the woman’s skin. Something foreign slips beneath the surface. Eggs, maybe. She doesn’t know it yet, but soon her body will become a vessel, a hive, a source of contamination.

AEBN Publishes Popular Searches for July, August

AEBN has published the top search terms for the months of July and August from its straight and gay theaters in all 50 states and the District of Columbia.

The Guardian Devotes Feature Article to XBIZ Amsterdam

British newspaper The Guardian sent a reporter to cover XBIZ Amsterdam earlier this month, resulting in a lengthy article about the annual European adult industry conference.

Show More