FTC Delays Enforcement of Click-to-Cancel Rule
Last November, the Federal Trade Commission (FTC or Commission) published its final click-to-cancel rule (the Rule), which requires sellers to make it as easy for consumers to cancel their enrollment into a service or goods plan as it was to sign up. As we discussed previously, the Rule prohibits sellers from misrepresenting any material facts and requires them to provide clear and conspicuous disclosures of material terms before obtaining billing information and charging consumers. Sellers must also obtain informed consent to a negative option feature (i.e., consumer silence or inaction construed as continuing acceptance) prior to charging consumers. The three sitting FTC commissioners – all Republicans – have now voted to extend the compliance deadline to July 14, 2025.
To review, prior to the end of the Biden Administration, the FTC commissioners voted 3-2, along party lines, to finalize the Rule, with Democrats – former FTC Chair Lina Khan, and former Commissioners Alvaro Bedoya and Rebecca Kelly Slaughter – supporting the Rule, and Republican Commissioners Andrew Ferguson and Melissa Holyoak opposing it. The Rule became effective in January, but regulated companies were given until May 14, 2025, to comply.
In a statement issued on May 9, 2025, the FTC delayed enforcement of the Rule by sixty days, citing concerns expressed during the rulemaking that the Rule’s complexities would take a “substantial amount of time to come into compliance.” The statement also noted that while “[t]he previous administration did not explain why [the earlier] deferment period was chosen … the Commission’s decision to defer enforcement necessarily acknowledged that compliance involved some level of difficulty.” The FTC also left the door open “to amending the Rule” to address any problems that the “enforcement experience exposes.”
Much has happened at the Commission since the Rule’s publication last year. With former Chair Khan’s resignation in January and the firing of the two Democratic commissioners in March, all commissioners who voted in favor of the Rule are now gone (two are suing the Administration), allowing Ferguson (now Chair), Commissioner Holyoak, and recently appointed Republican Commissioner Mark Meador, to approve extending the compliance timeframe.
Executive Orders and statements by the current Administration questioning the autonomy of independent agencies such as the FTC, and legal challenges to such efforts, make agency enforcement priorities, existing and proposed rules and regulations, and indeed the structure and organization of independent agencies, uncertain. The uncertainty is not limited to the FTC. As we wrote here, less than two weeks after the Consumer Product Safety Commission (CPSC) voted 3-2 to advance a safety standard for lithium-ion batteries, the three Democratic commissioners who voted for the proposed rule were terminated, and CPSC withdrew the proposal before it could be published in the Federal Register. Plans to fold the CPSC into the Department of Health and Human Services have also been reported.
The FTC and CPSC are two key agencies with authority over legal issues important to consumers and consumer brands. Advocates and companies are watching closely to see how government oversight of consumer and product safety regulation may change.