The Federal Trade Commission voted on Friday to delay the application of the negative option rule, known as the “Click-to-chanel” rule that requires companies to make it easy to cancel a subscription as it had been registered.
The rule, which was proposed for the first time in 2023, targeted companies that sell physical and digital subscriptions-all, from streaming services to registrations to the gym-so-called simple registration flows, only to make customers discover later that they must go through a much more complex process or that requires time to cancel.
Based on the rule of the negative option, companies would not be able to force customers to cancel the subscriptions through a method other than what they used to register, so if you registered with some clicks on the website of a company, you should also be able to cancel on their website. Companies are also required to provide relevant information on the cancellation before collecting customers payment information.
According to the FTC, the rule entered into force on January 19, but the application of some provisions was delayed until May 14. Now the FTC is delaying the application of another 60 days, until July 14th.
“After conducting a new evaluation of the charges that the forcing of compliance by this date would impose, the Commission has established that the original deferral period has insufficiently explained the complexity of compliance,” said the FTC in a note.
The Commission voted 3-0 to delay the application. The FTC traditionally has five commissioners – three from the president’s party and two from the opposing party – but President Donald Trump fired the two democratic commissioners in March. These commissioners therefore sued Trump, claiming that their dismissal has violated a precedent of the Supreme Court that the president cannot fire the commissioners of the FTC without cause.
Despite the delay, the FTC has declared that the application of 14 July will actually begin, when “the regulated entities must comply”.
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“Of course, if that execution experience exposes problems with the rule, the commission is open to modify the rule to face these problems,” added FTC.
