Today, subscription businesses start a new compliance era as the Federal Trade Commission’s “Click-to-Cancel” regulation takes effect. The rule mandates that subscription cancellations must be as simple as sign-ups, emphasizing consumer convenience and transparency.
What’s Effective Now
As of today, businesses offering subscriptions must:
- Prohibition on misrepresentations, requiring businesses to provide clear language on auto-renew and accessible online cancellation process.
- Avoid tactics that create unnecessary friction, such as requiring phone calls or additional steps that were not part of the sign-up process.
What’s Coming Later
Additional requirements, including stricter disclosure standards and explicit customer consent for renewals, are scheduled to roll out in future phases. These enhancements aim to address loopholes and clarify auto-renewal practices.
Controversies and Challenges
While hailed as a consumer protection milestone, the rule has faced pushback. Critics argue that implementation could be costly and complicated, especially for smaller operators. Others point to potential conflicts with state laws that could create a patchwork of compliance obligations.
Industry observers also warn that enforcing these rules consistently may be challenging, and bad actors might adapt with more subtle tactics that still confuse consumers.
INSIDER TAKE
For subscription executives, the Click-to-Cancel regulation underscores the need to simultaneously prioritize user experience and compliance. Ensuring an intuitive cancellation process mitigates legal risks and reinforces trust with subscribers, a critical factor in long-term retention.
However, businesses must also prepare for the phased rollout of additional requirements. Proactive updates to subscription flows, disclosures, and consent mechanisms will position companies to navigate evolving regulations without disruption.
The complexities of state and federal law overlap mean that subscription businesses should also seek expert advice to avoid compliance pitfalls and potential penalties.
Want to Learn More?
Join our February 5 webinar featuring subscription legal expert Mark Roth of Cobalt Law. We’ll provide a critical analysis of the evolving legal, regulatory, and political landscape shaping subscription businesses in 2025 and strategies for navigating Click-to-Cancel compliance. Register here.