Eighth Circuit Cancels FTC's "Click-to-Cancel" Rule

On July 8, the United States Court of Appeals for the Eighth Circuit vacated the Federal Trade Commission's Negative Option Rule, also referred to as the "Click-to-Cancel" rule (the "Rule"), determining that the FTC sidestepped a requirement to engage in preliminary regulatory analysis before finalizing it.

The Rule, which was set to take effect on July 14, required retailers to include detailed disclosures before checkout, obtain consumer consent to the terms before checkout, and maintain easy cancellation mechanisms. It expanded upon the previous regulation, referred to as the "1973 rule," which imposed much less specific requirements (e.g., sellers were required to "provide periodic notices offering goods to consumers and then send and charge for those goods if the consumer does not decline the offer"), with the goal of protecting consumers from signing up and being charged for automatically renewable subscription programs without their knowledge.