Lina Khan’s Federal Trade Commission (FTC) has introduced a final “Click-to-Cancel” rule aimed at making it easier for consumers to cancel recurring subscriptions or memberships. The rule mandates that businesses provide a cancellation process as simple as the sign-up process and prohibits misleading practices related to subscriptions. It also requires sellers to disclose essential information before obtaining billing details and ensures that consumers consent before charging.
As with many regulations, the rule assumes a one-size-fits-all approach, ignoring the complexities of different industries and the varying ways companies operate. By mandating that businesses implement a standardized, “simple” cancellation process, the FTC risks stifling innovation and burdening companies with additional compliance costs that could be passed on to consumers through higher prices.
Moreover, this rule perpetuates a growing trend of federal agencies expanding their regulatory authority under the guise of consumer protection without sufficient evidence that such broad intervention is necessary. Consumers should be empowered through education and competition—not through heavy-handed mandates that interfere with market dynamics. The private sector is already incentivized to address customer dissatisfaction to remain competitive. Adding layers of bureaucratic red tape only complicates the relationship between businesses and consumers, leading to unintended consequences like decreased customer service options and reduced flexibility for subscription models.
In his op-ed, former U.S. Senator Scott Brown critiques FTC Chair Lina Khan’s regulatory approach, warning that her anti-monopoly stance and aggressive scrutiny of large companies like Amazon and Google undermine American innovation and competitiveness. Khan’s actions, driven by ideological opposition to corporate success, ignore the consumer benefits these companies provide, such as affordable services and technological advancements. Excessive regulation stifles business growth and harms the U.S.’s competitive edge in global markets, particularly emerging technologies like artificial intelligence.
While the rule aims to eliminate deceptive practices, its broad application to “almost all negative option programs in any media” risks capturing legitimate business models that offer consumers real value. This could discourage businesses from offering convenient subscription-based services, fearing the regulatory hurdles associated with compliance.
Ultimately, government intervention should be minimal, especially when addressing issues that can be resolved through market competition and consumer choice. The FTC’s new rule may do more harm than good, burdening businesses with costly compliance measures while offering minimal additional protection to consumers. We should be cautious about expanding regulatory frameworks that limit innovation and shift the burden to consumers and businesses.
The rule, part of the FTC’s modified 1973 Negative Option Rule, responds to many complaints regarding difficult-to-cancel subscriptions. In 2024, the FTC received an average of about 70 daily complaints. While the rule generally protects consumers from deceptive practices, it has dropped provisions requiring annual reminders about subscriptions and restrictions on presenting alternative offers to those trying to cancel.
The rule goes into effect 180 days after its publication in the Federal Register, with the Commission approving it by a 3-2 vote.