On July 8, 2025, the U.S. Court of Appeals for the Eighth Circuit vacated the Federal Trade Commission’s (“FTC”) Click to Cancel Rule (the “Rule”), which was previously scheduled to take effect on May 14, 2025, and later postponed to July 14, 2025. For a detailed analysis of the FTC’s Rule, please see our previous posts here.
In Commerce Group, Inc. v. FTC, the court held that the FTC failed to comply with 15 U.S.C. § 57b-3(b)(1), which requires a preliminary regulatory analysis—including consideration of alternatives, costs, benefits, and likely effectiveness—for any rule expected to have an annual economic impact of $100 million or more. Citing this procedural failure, the court set aside the Rule under both the FTC Act and Administrative Procedure Act. The full opinion is available here.
The court did not address the substantive challenges to the Rule, leaving unresolved the scope of the FTC’s authority to impose cancellation-related requirements by regulation. However, the FTC continues to pursue related enforcement actions under its general authority. Notably, trial is set for 2026 in the FTC’s case against Amazon, which alleges deceptive enrollment and cancellation practices in connection with the Amazon Prime program. That litigation may further clarify the FTC’s power under Section 5 of the FTC Act in the absence of formal rulemaking.
While compliance with the Click to Cancel Rule is no longer required, many states maintain auto-renewal laws that apply to specific consumer-facing industries (e.g., health clubs, home security, subscription services) and are enforceable by state attorneys general. In addition, most states have adopted deceptive trade practices statutes that broadly prohibit misleading consumer conduct.
