If you think your business has been unfairly targeted by the Federal Trade Commission, you may be right. And the best strategy to prevent overreach is to hire dedicated FTC defense attorneys who will make the best arguments and keep making them until there is success. The recent overturning of the FTC’s “Click-to-Cancel” Rule is a good example of this. Love or hate the Rule, the businesses that challenged the Rule hired lawyers who made the best arguments, and those lawyers kept making the arguments until they succeeded.

As reported here, in a recent decision, the federal Eighth Circuit Court of Appeals overturned the “Click-to-Cancel” Rule that had been adopted by the FTC earlier in 2025. In brief, the Rule impacted businesses offering monthly (or other periodic) subscription services for various goods and services. Under the now-overturned Rule, such businesses would have had to make cancellation of the subscription “as easy as” signing up for the service. So, if a consumer signed up and joined the “Sweater-of-the-Month Club,” for example, the company providing the products would have had to make it “easy” to cancel the subscription. Consumer advocacy groups have long complained that many subscription-based service companies impose significant hurdles to cancellation, leading to consumers receiving products that they did not really want and having to pay recurring fees that they could not avoid.

The case shows that, when defending against new FTC rulemaking, persistence pays. The FTC has been trying for many years to promulgate some sort of “easy” online cancellation requirement. The FTC finally issued the proposed Rule, but as noted, it was successfully challenged. In this case, the successful challenge was related to the requirement that the FTC conduct and publish a preliminary regulatory analysis before imposing the Rule. Essentially, if a federal agency determines that a proposed Rule will impose significant costs on impacted businesses, an analysis must be conducted and published for comment. In this case, the FTC found that the new Rule would impose on businesses more than $100 million annually, both in administrative costs and lost business. The FTC’s failure to conduct and publish the regulatory analysis led the Eighth Circuit to overturn the Rule. The FTC has three basic options at this point: appeal the case to the Supreme Court, start over again, or abandon the Rule.

It must be noted that the FTC was criticized for procedural failures. The court did not address the merits of the Rule or comment on the wisdom/validity of requiring an “easy” method of subscription cancellation. It should also be noted that some State-level lawmakers are addressing the problem by statute, rather than via rulemaking. For example, California passed a statute in 2024 that essentially requires what the FTC Rule would have required. Of course, the California law only applies to businesses that either reside in California or conduct business there. The FTC Rule would have had a national effect.

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For more information, contact the experienced FTC Defense Lawyers at Revision Legal. You can contact us through the form on this page or call (855) 473-8474.

The History of the Click-to-Cancel Rule

The FTC’s efforts to regulate subscription cancellations have a long history. As far back as 2009, the FTC issued guidance on negative option marketing — arrangements where a seller interprets a consumer’s silence or inaction as consent to purchase or continue a subscription. The agency updated its Negative Option Rule in 2021 and then proposed the more expansive “Click-to-Cancel” Rule in March 2023.

The Click-to-Cancel Rule, officially titled the Negative Option Rule amendment, would have required businesses offering any subscription or recurring billing arrangement to: (1) clearly disclose all material terms before obtaining a consumer’s billing information; (2) obtain the consumer’s express informed consent; and (3) provide a cancellation mechanism that is as simple as the sign-up process. The Rule also would have prohibited sellers from making consumers navigate a retention offer or “save” flow as a prerequisite to cancellation.

Why the Eighth Circuit Struck Down the Rule

The Eighth Circuit’s decision to vacate the Click-to-Cancel Rule was based on a procedural defect, not a ruling on the merits. Under the Regulatory Flexibility Act (RFA), 5 U.S.C. § 601 et seq., federal agencies must prepare an Initial Regulatory Flexibility Analysis (IRFA) when a proposed rule would have a significant economic impact on small businesses.

The FTC’s own economic analysis concluded that the Rule would impose more than $100 million annually in costs on affected businesses — a threshold that triggered the RFA’s IRFA requirement. The FTC did not conduct or publish the required IRFA before adopting the Rule. The Eighth Circuit held that this procedural failure was fatal, and vacated the Rule without reaching the question of whether the substantive requirements were lawful.

What the FTC Can Do Next

The Eighth Circuit’s vacatur leaves the FTC with three options:

• Appeal to the Supreme Court — a petition for certiorari would ask the Supreme Court to review the Eighth Circuit’s ruling; given the current Court’s skepticism of broad agency authority, this path carries significant risk for the FTC
• Start over with a compliant rulemaking — the FTC can initiate a new rulemaking, conduct and publish the required IRFA, re-open a public comment period, and re-adopt substantively similar regulations; this process would take two to three years at minimum
• Enforce against deceptive cancellation practices under Section 5 — the FTC retains full authority under Section 5 of the FTC Act to pursue enforcement actions against businesses that use deceptive tactics to prevent cancellation, even without a specific rule

What Businesses Should Do in the Meantime

Despite the vacatur of the Click-to-Cancel Rule, businesses offering subscription services should not assume they face no legal risk. The FTC has broad Section 5 authority to pursue deceptive subscription practices. Moreover:

• California’s Automatic Renewal Law (Cal. Bus. & Prof. Code § 17600 et seq.) already requires easy cancellation for California subscribers
• Several other states have enacted or are considering similar statutes
• Class action plaintiffs’ attorneys have used state consumer protection laws to pursue subscription-trap cases on behalf of consumers
• The Consumer Financial Protection Bureau (CFPB) has also expressed interest in recurring billing practices

The best practice for subscription businesses is to ensure that cancellation is genuinely easy — not because a federal rule requires it, but because consumer goodwill and reduced chargeback rates justify the investment.

Contact the Attorneys at Revision Legal

If you have questions or need legal advice, contact the experienced attorneys at Revision Legal. Our team handles FTC compliance and internet law matters for businesses and individuals nationwide. Call us at (855) 473-8474 or use the contact form on our website.