Streaming Subscriptions May Get Tougher to Cancel

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In a blow to consumers, streaming platforms won’t have to make it easier to cancel subscriptions.

On Tuesday, a federal appeals court overturned the Federal Trade Commission’s (FTC) “click-to-cancel” regulation. This rule would have required companies to give their users easy ways to cancel recurring payments instantly and obtain consent before converting free trials or auto-renewals into paid subscriptions. If implemented, businesses would have been prohibited from making cancellation procedures more complicated than the sign-up process. The aim was to abolish lengthy cancellation processes designed to keep users in unintended subscriptions against their will.

The Federal Trade Commission (FTC), without providing a statement, was preparing to enforce the rule starting from July 14. Originally slated for implementation in May, the enforcement was postponed as Trump’s FTC administration opted to soften the tough stance on consumer protection that the agency had under former chair Lina Khan. Lina Khan faced widespread criticism from the business community due to her disregard of industry concerns.

The action was carried out as part of a wider effort to curb misleading subscription tactics. In the year 2023, the agency filed a lawsuit against Amazon, accusing them of tricking consumers into subscribing to Prime service and making it difficult for them to cancel their membership. The lawsuit claimed that some users only wanted Prime Video but had to go through an intentionally complex cancellation process, which involved navigating a four-page, six-click, 15-option sequence to cancel their subscription.

Under the latest regulation, services like Amazon, Hulu, Max, Disney+, and others would have been required to streamline the cancellation process for their users. This is due to the fact that they all employ automated renewals, a practice that has come under close examination by the FTC during Khan’s tenure.

2023 saw The Hollywood Reporter evaluating various video streaming services by subscribing and subsequently cancelling them – namely Prime Video, Disney+ Hulu bundle, Max, Netflix, and Peacock. It was discovered that Amazon required the most clicks to complete the cancellation process. Many of these platforms also presented users with discounts or alternative plans as options, which raised concerns due to their potential for hindering the straightforward cancellation of a subscription.

In a statement, Netflix said “members can cancel their membership at any time.”

The Motion Picture Association objected to the rule, stating in a submission that the proposed modifications are impractical and could hinder the industry without significantly enhancing consumer protection. Subsequently, an association representing cable and internet providers contested the rule, claiming that the FTC exceeded its jurisdiction.

In its decision on Tuesday, the Eighth Circuit U.S. Court of Appeals pointed out that the Federal Trade Commission failed to follow an essential procedural step when enacting the initiative. This oversight denied affected companies a chance to argue against the agency’s adoption of it, according to the court.

In cases where a rule by the FTC is expected to have an economic impact less than $100 million, the agency can bypass the initial step of publishing a preliminary analysis that evaluates the effectiveness and alternative solutions for the proposed rule. However, it was determined that this exemption was incorrectly applied in this instance.

As a gamer, I’d rephrase it like this: “The court isn’t okay with underhanded tactics, but in this case, they ruled that the Commission’s rulemaking process had flaws that proved fatal. If there had been an opportunity for everyone to voice their concerns earlier on, it might have influenced the Commission’s final decision about the scope of the rules and whether viable alternatives were truly unworkable.

In a post on X, FTC commissioner Mark Meador stated that the rule won’t be implemented due to the Biden-led FTC skipping crucial steps and not adhering to legal procedures. The regulation was enacted in 2023, with agency chair Andrew Ferguson being against this decision.

The outlook for this project is uncertain, but under Ferguson’s leadership at the FTC, they have persisted in examining questionable subscription tactics. Recently, in April, the agency filed a lawsuit against Uber, claiming they were deceiving users by making it difficult to cancel their subscriptions.

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2025-07-09 02:24