{"id":38124,"date":"2025-07-11T16:46:12","date_gmt":"2025-07-11T16:46:12","guid":{"rendered":"https:\/\/publicknowledge.org\/?p=38124"},"modified":"2025-07-11T17:32:43","modified_gmt":"2025-07-11T17:32:43","slug":"why-click-to-cancel-deserved-better","status":"publish","type":"post","link":"https:\/\/publicknowledge.org\/why-click-to-cancel-deserved-better\/","title":{"rendered":"Why the FTC\u2019s Click-to-Cancel Rule Deserved Better"},"content":{"rendered":"\n

David Dayen\u2019s piece<\/a> on the Eighth Circuit\u2019s decision to vacate<\/a> the Federal Trade Commission\u2019s (much-needed) click-to-cancel rule hits many of the right notes about how administrative law has become increasingly hostile to agency action. But it\u2019s not the Administrative Procedure Act (APA) specifically that the FTC ran into here: it\u2019s the peculiar procedural requirements<\/a> of the Magnuson-Moss Act<\/a>, which only applies to the FTC. And, really, the FTC\u2019s own unforced error.<\/p>\n\n\n\n

The click-to-cancel rule the FTC was seeking to implement is a basic consumer protection measure: if a company makes it easy to sign up for a subscription with a few clicks, it should be just as easy to cancel. The rule would have updated the FTC\u2019s existing \u201cnegative option\u201d billing regulations \u2013 originally written in 1973 for mail-order book clubs \u2013 to cover modern subscription practices across all media and industries. Under the new rule, businesses would have been required to provide \u201ca simple mechanism\u201d for cancellation that\u2019s \u201cat least as easy to use as the mechanism the consumer used to consent<\/a>\u201d to the subscription initially. It\u2019s hard to argue with the basic fairness of that approach: Consumers shouldn\u2019t have to navigate phone trees, mail certified letters, or show up in person to cancel a gym membership they signed up for online. These contrived requirements are used to lock in customers and deter competition from rivals. Public Knowledge has long supported<\/a> the FTC\u2019s authority to write rules that promote competition and protect consumers.<\/p>\n\n\n\n

The FTC initially estimated that its click-to-cancel rule would have an annual economic impact of less than $100 million, which would have exempted it from the Magnuson-Moss Act\u2019s requirement to conduct a \u201cpreliminary regulatory analysis<\/a>.\u201d But when Administrative Law Judge (ALJ) Carol Fox Foelak disagreed and found the rule\u2019s impact would exceed that threshold, the FTC had a choice: conduct the required analysis or argue it wasn\u2019t necessary. (The FTC is not formally bound by the ALJ\u2019s fact-finding, but it can\u2019t just ignore it: The agency would have to explain why it disagreed.)<\/p>\n\n\n\n

The FTC chose poorly. Instead of doing the analysis, it argued that the regulatory analysis requirement didn\u2019t apply when triggered at a \u201clate stage\u201d of rulemaking. But this wasn\u2019t a factual question where the agency would get deference \u2013 it was a legal question that courts decide on their own, especially after Loper Bright<\/em><\/a> (the U.S. Supreme Court case that overruled the longstanding Chevron<\/em> doctrine<\/a>, where agencies got deference from courts on some questions of law).<\/p>\n\n\n\n

If the FTC had simply done the analysis, it would have been hard to challenge. The Magnuson-Moss Act specifically says that \u201cthe contents and adequacy of any regulatory analysis\u2026 shall not be subject to any judicial review,\u201d except where the Commission has \u201cfailed entirely to prepare a regulatory analysis.\u201d The FTC walked right into the one exception to this broad protection.<\/p>\n\n\n\n

Even after Loper Bright<\/em><\/a>, agencies still receive deference on factual determinations where they have interpretive authority. As the Supreme Court noted in that decision, \u201cagencies have no special competence in resolving statutory ambiguities,\u201d but they do retain the authority to make factual findings and policy judgments. Beyond the specific provisions of the Magnuson-Moss Act, a properly conducted regulatory analysis would have involved exactly these kinds of factual findings about economic impacts and policy trade-offs.<\/p>\n\n\n\n

The extra procedural hurdles in Magnuson-Moss were designed to constrain the FTC. Congress was worried about an agency that could write rules affecting the entire economy, unlike sector-specific agencies like the Federal Communications Commission or Environmental Protection Agency. They are probably unnecessary and counterproductive: We already have the Administrative Procedure Act setting the rules for how federal agencies can propose and issue regulations. It\u2019s sufficient! And the broader attacks on FTC authority we\u2019ve seen in cases like the non-compete ban challenge<\/a> are even more concerning. Courts are increasingly questioning whether the FTC has substantive rulemaking authority at all, not just whether it\u2019s following the right procedures. Those wholesale challenges to agency authority are a real threat to effective regulation.<\/p>\n\n\n\n

Dayen is absolutely right that administrative law has become increasingly hostile to agency action. The elimination of Chevron <\/em>deference, combined with decisions like Corner Post<\/em><\/a> (extending the statute of limitations for APA challenges), creates an environment where agencies face both stricter substantive review and expanded opportunities for challenge. It\u2019s a perfect storm for regulatory paralysis. And as for the FTC, current leadership voted against the click-to-cancel rule, and is instead having the FTC wade into the culture wars and second-guess medical professionals<\/a>, so I wouldn\u2019t expect much help.<\/p>\n\n\n\n

But, the problem isn\u2019t that agencies have to explain themselves; it\u2019s that courts have made the bar for adequate explanation impossibly high and have created procedural traps that can doom even well-intentioned rules. The basic idea underlying administrative law \u2013 that agencies should act based on a factual record and explain their decisions with reference to that record \u2013 is a good one. Notice-and-comment rulemaking is the best way we\u2019ve come up with to do this. It would be impossible for Congress to operate that way, but for agencies with delegated power that aren\u2019t directly elected, transparency and reasoned decision-making are appropriate constraints. And while it definitely sucks that this rule was struck down, it is good to have tools to constrain agencies\u2026 if only courts would actually apply the same rules to President Trump\u2019s agencies that they apply when Democrats are in power<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

The cancellation of click-to-cancel is a yet another blow to consumer protection.<\/p>\n","protected":false},"author":29,"featured_media":37966,"parent":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5],"tags":[14],"class_list":["post-38124","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insights","tag-platform-regulation"],"acf":[],"yoast_head":"\nWhy the FTC\u2019s Click-to-Cancel Rule Deserved Better - Public Knowledge<\/title>\n<meta name=\"description\" content=\"Public Knowledge promotes freedom of expression, an open internet, and access to affordable communications tools and creative works. 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