New York
CNN
—
Cancelling your gym membership isn’t likely to become easier anytime soon.
A US appeals court on Tuesday blocked a rule that would have required businesses to make it as easy for consumers to cancel subscriptions and memberships as it is to sign up. That includes everything from gym memberships to digital streaming and e-commerce to cable TV service.
The Federal Trade Commission, which passed the so-called “click-to-cancel” rule under former Democratic Chair Lina Khan during the Biden administration, failed to conduct a preliminary analysis of the costs and benefits of the rule, the court said. The rule was set to take effect next week.
The FTC declined to comment on the decision or its next steps.
The proposed rule was meant to address common issues with subscription plans. That includes sellers that misrepresent facts about the product or service, those who make it difficult to cancel, and customers who are billed even when they didn’t explicitly agree to pay, such as when a free trial ends.
But the proposal was met with protest by business groups such as the US Chamber of Commerce, which sued to block the rule from going into effect. The Chamber of Commerce said the rule was a “power grab” by the FTC to “micromanage business decisions.”
The FTC under President Donald Trump delayed the implementation of the rule.
Advocacy group American Economic Liberties Project blamed the Trump administration’s delay for the outcome, and called on the FTC to reissue the rule.
“The Chamber of Commerce sued to kill the FTC’s massively popular Click-to-Cancel Rule — and Chair Andrew Ferguson, who voted against the rule, delayed its enforcement long enough for big corporate lobbyists to win in court,” Nidhi Hegde, executive director of the group, said in a statement. “By slow-walking a simple, massively popular protection, (the FTC) ensured that hardworking people will keep getting stuck with subscriptions they don’t want or can’t afford from cable companies, gyms, and online services.”
