FTC "Click to Cancel" Canceled: What Subscription Businesses Need to Know
Big news for subscription businesses: the FTC’s “click to cancel” rule is off the table—for now. Discover why it was struck down and how to navigate compliance moving forward.
Subscription businesses racing to comply with the FTC’s “click to cancel” negative option rule before the July 14 deadline can breathe a sigh of relief.
On July 8, 2025 the 8th U.S. Circuit Court of Appeals struck down the Commission’s rule, which aimed to bring nationwide uniformity to automatic renewal regulations.
The rule would have required businesses to make canceling a subscription as easy as it is to sign up, and allow cancellation in the “same medium” used to sign up.
Why “click to cancel” was struck down
Soon after the FTC rule was finalized, industry groups filed petitions for review in several U.S. Courts of Appeals, which were consolidated into a single case before the 8th Circuit.
The court decided that the FTC had failed to conduct a preliminary analysis of the costs and benefits of the rule, a procedure required under the FTC Act’s rule-making process. The FTC argued this analysis was unnecessary because it had initially estimated the rule’s economic impact would be below $100 million, but this was rejected.
The opinion concludes, “While we certainly do not endorse the use of unfair and deceptive practices in negative option marketing, the procedural deficiencies of the Commission’s rulemaking process are fatal here.”
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Existing regulations and what may be coming
While the ruling removes immediate pressure to overhaul cancellation processes, businesses must still ensure compliance with state automatic renewal laws (ARLs) and federal guidelines to avoid penalties.
These include the Restore Online Shoppers’ Confidence Act and the FTC’s 2021 enforcement policy, and local statutes like those in California, New York, Minnesota and many other states.
And of course the FTC may revise its rulemaking process and reintroduce a similar rule, requiring businesses to stay vigilant. Meanwhile, prioritizing user-friendly cancellation processes can enhance customer trust and reduce churn, even without federal mandates.
Maintain compliance and retain customers
Navigating state and federal regulations while keeping customers happy is no small feat, but ProsperStack’s churn-busting cancellation flow software—trusted by brands like Nutrafol, Nestle and Hootsuite—makes it easy.
Ready to simplify compliance and keep more customers? Schedule a demo today.
