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572 points gausswho | 24 comments | | HN request time: 2.088s | source | bottom
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AIorNot[dead post] ◴[] No.44505836[source]
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1. privatelypublic ◴[] No.44505844[source]
Did you read the article? "Procedures weren't followed."

Seems like an almost intentional mistake tbh

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2. SoftTalker ◴[] No.44505856[source]
Yeah not a great article. "failed to follow required procedures under the FTC Act during the rule-making process" but no real details on what the procedures require that the commission did not do.
replies(2): >>44506000 #>>44506167 #
3. gizmo686 ◴[] No.44505864[source]
Or motivated reasoning for the court to reach the outcome it wanted.
4. Gigachad ◴[] No.44505955[source]
Procedures can only be ignored for the purpose of installing a police state. Not for consumer benefit.
5. ◴[] No.44505990[source]
6. mystraline ◴[] No.44506000[source]
You have 2 trump appointees and George hw bush appointee.

Were you expecting respectable and proper jurisprudence? I'm not any more.

7. standardUser ◴[] No.44506048[source]
It's a pro-business decision by the most conservative court in the land, so it would have been surprising if, in all of jurisprudence, they couldn't find something to squash it with, at least temporarily.
8. db48x ◴[] No.44506167[source]
A trivial search will get you the court opinion itself <https://ecf.ca8.uscourts.gov/opndir/25/07/243137P.pdf>, so regardless of how bad the news article is you should not be uninformed.

From the abstract:

    …the Commission failed to follow procedural requirements under § 22 of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. § 57b-3(b)(1)
A more detailed explanation:

    The Commission’s formal rulemaking authority is found in § 18 of the FTC
    Act. Section 18 authorizes the Commission to adopt “rules which define with
    specificity acts or practices which are unfair or deceptive acts or practices in or
    affecting commerce” within the meaning of § 5, as well as “requirements prescribed
    for the purpose of preventing such acts or practices.” 15 U.S.C. § 57a(a)(1)(B)
    (emphasis added).
    
    …
    
    Besides the specificity and prevalence requirements, § 18 requires a number
    of procedural steps, some of which go beyond those required for APA notice-and-
    comment rulemaking. The FTC must first publish an “advance notice of proposed
    rulemaking” containing “a brief description of the area of inquiry under
    consideration, the objectives which the Commission seeks to achieve, and possible
    regulatory alternatives under consideration.” 15 U.S.C. § 57a(b)(2)(A). Also
    required is a notice of proposed rulemaking “stating with particularity the text of the
    rule, including any alternatives, which the Commission proposes to promulgate, and
    the reason for the proposed rule.” Id. § 57a(b)(1)(A). Interested parties must be
    afforded the opportunity for “an informal hearing” and to “to submit written data,
    views, and arguments” on the proposed rule. Id. § 57a(b)(1)(B)-(C), (c).
    
    Congress further required the Commission to conduct regulatory analyses of
    proposed and final rules, or amendments to rules, at two stages of the rulemaking
    process. First, when the Commission publishes a notice of proposed rulemaking, it
    also must issue a “preliminary regulatory analysis” containing “a description of any
    reasonable alternatives to the proposed rule which may accomplish the stated
    objective of the rule” and for the proposed rule and each alternative, “a preliminary
    analysis of the projected benefits and any adverse economic effects and any other
    effects, and of the effectiveness of the proposed rule and each alternative in meeting
    the stated objectives of the proposed rule.” 15 U.S.C. § 57b-3(b)(1)(B)-(C).
    
    Second, the Commission must issue a “final regulatory analysis” when it
    promulgates a final rule. 15 U.S.C. § 57b-3(b)(2). Similar to the preliminary
    regulatory analysis, the final regulatory analysis must include a description of
    alternatives considered by the Commission and an analysis of projected benefits and
    adverse economic and other effects. The Commission must also provide “an
    explanation of the reasons for the determination of the Commission that the final rule
    will attain its objectives” and a “summary of any significant issues raised by the
    comments submitted . . . in response to the preliminary regulatory analysis.” Id.
    § 57b-3(b)(2)(B)-(E). Importantly, the preliminary and final regulatory analysis
    requirements do not apply to “any amendment to a rule” unless the FTC estimates that
    the amendment “will have an annual effect on the national economy of $100,000,000
    or more.” Id. § 57b-3(a)(1)(A).

Notice all of the steps. “advance notice of proposed rulemaking”, “notice of proposed rulemaking”, “preliminary regulatory analysis”, “an informal hearing” plus the ability of concerned parties “to submit written data, views, and arguments” to the FTC, and a “final regulatory analysis”. The court draws our attention to the fact that the FTC never did either of the regulatory analysis steps, and points out that they are required.

The FTC had opted out of doing those analyses on the basis that the new rule would have an annual impact of less than a hundred million dollars. The court however notes that this is quite unlikely:

    Based on the FTC’s estimate that 106,000 entities currently offer
    negative option features and estimated average hourly rates for professionals such as
    lawyers, website developers, and data scientists whose services would be required by
    many businesses to comply with the new requirements, the ALJ observed that unless
    each business used fewer than twenty-three hours of professional services at the
    lowest end of the spectrum of estimated hourly rates, the Rule’s compliance costs
    would exceed $100 million. Such an estimate was “clearly unrealistically low
    inasmuch as there are several new requirements proposed that would require changes
    in existing practices and/or disclosure forms.”
Thus the FTC erred when it skipped these steps. The remedy is to vacate:

    Section 18 of the FTC Act directs that a reviewing court “shall
    hold unlawful and set aside the rule” if it finds agency action to be “without
    observance of procedure required by law.” 15 U.S.C. § 57a(e)(3); 5 U.S.C.
    § 706(2)(D). “The ordinary practice is to vacate unlawful agency action.” United
    Steel v. Mine Safety & Health Admin., 925 F.3d 1279, 1287 (D.C. Cir. 2019).
This doesn’t mean that the rule is unconstitutional, just that the FTC has to actually do things correctly. The court hasn’t ruled on the law itself because it is moot.
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9. throw10920 ◴[] No.44506228{3}[source]
Thank you for linking the actual legal text! (if only it weren't super hard to read due to hard wrapping - one of the reasons why HTML is generally better than PDF)
10. collingreen ◴[] No.44506255{3}[source]
Gotta pay all those data scientists and lawyers the big bucks in order to figure out how to checks notes stop actively preventing customers from canceling your service when they want to.

I'm happy to consult on this with all those poor businesses for under $100,000,000 in order to help the court vibes feel like the cost isn't over the limit.

I feel confident I can affordably write a few whitepapers and design guidelines to help these poor folks out as they research if there should be a cancel button and if it should work.

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11. db48x ◴[] No.44506339{4}[source]
With 106,000 companies doing this, that’s less than $1,000 each. Do you think that _your_ company could review all of its marketing materials for compliance with a new FTC rule for less than that? How much would you as a consultant charge one of those companies for your assistance?

But if you don’t like the rule, talk to your local Congresscritter and ask them to propose a bill to amend or remove it. Complaining about it in snarky internet comments isn’t going to get you anywhere.

replies(2): >>44507071 #>>44511120 #
12. glaucon ◴[] No.44506370{3}[source]
Thanks for the analysis.

Gotta laugh at the threshold being USD100M costs to the affected businesses without the law taking into account how much the annual costs to consumers are, assuming the continuation of the practices.

replies(1): >>44506621 #
13. db48x ◴[] No.44506621{4}[source]
Why is that laughable? Congress decided that all rules changes need additional scrutiny if they impose large costs. After all, those costs are eventually going to be passed down to consumers so making overly–complicated rules just ends up hurting consumers. And there has to be _some_ threshold number; they couldn’t just leave that one undefined or nobody would ever bother with the extra steps.
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14. eviks ◴[] No.44507071{5}[source]
> Complaining about it in snarky internet comments isn’t going to get you anywhere.

In what fantasy land is the following any different?

> talk to your local Congresscritter and ask them to propose a bill to amend or remove it

15. eviks ◴[] No.44507086{5}[source]
> After all, those costs are eventually going to be passed down to consumers

No they aren't. The ease with which you can continue to charge consumers without providing value to them directly affects the total amount of those charges (also, profits is a variable)

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16. db48x ◴[] No.44507269{6}[source]
Suppose I am selling magazine subscriptions. I basically already follow all of the FTC’s new rules, because I’m not trying to cheat. But the new rules are pages and pages of amendments to pages and pages of existing rules. Those rules are complicated and detailed. How can I be _sure_ that _all_ of my marketing materials are compliant with these new rules, which detail exactly what information I must disclose to my customers and potential customers. I have to first understand the new rules, then review all my existing marketing materials, possibly with the aid of legal advice. Maybe I have to reword some things so that I’m using exactly the language specified by the FTC. Changing a website is cheap, but what about my printed materials? I’ve got 6 editions in various stages of completion for each of my dozen different brands.

Those costs are definitely going to be passed along to the consumer in some form or another. Fewer sales, fewer discounts, higher subscription prices, higher advertising prices, thinner magazines, it doesn’t matter. It all flows down to the consumers in the end. I don’t see how you can argue that these costs _can’t_ be passed down to the consumers.

And it’s definitely going to cost more than $1,000. The FTC estimates that there are over a hundred thousands entities offering subscriptions of some kind to customers in the US. 100,000 × $1,000 = $100,000,000. That’s the threshold beyond which rules changes need additional review.

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17. eviks ◴[] No.44507504{7}[source]
> I don’t see how you can argue that these costs _can’t_ be passed down to the consumers.

Because you've ignored the profits factor and have supposed away the other factor I mentioned as part of your hypothetical

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18. glaucon ◴[] No.44508677{5}[source]
What makes me laugh (sardonically) is that I would have hoped that, as well as considering what the costs are to the suppliers, the law might also have taken into account the size of the injury being suffered by consumers. And that if that injury was large enough then that problem should override concern the cost to the companies that have chosen to use sharp practices in maintaining their revenue flow.

Maybe you saw something in the quoted text that I didn't but I understood the USD100M to mean the costs that would arise due to companies who are currently utilising these practices stopping those practices. There's not an ongoing cost to those companies unless you call the deprivation to them of the revenue they shouldn't be receiving because their customers no longer wish to buy the service a cost.

> After all, those costs are eventually going to be passed down to consumers

And when they are the consumers will be able to stop buying off those companies, well, I mean, as long as they can cancel their subscription.

replies(1): >>44511405 #
19. db48x ◴[] No.44510756{8}[source]
> The ease with which you can continue to charge consumers without providing value to them directly affects the total amount of those charges (also, profits is a variable)

I can’t even parse this sentence. You appear to be assuming a dishonest magazine company, rather than an honest one. The hundred million rule is there to protect the honest companies from overly–complex rules brought about in an attempt to eliminate dishonest ones, so starting with a dishonest one is irrelevant. We know that they are not going to comply with the rules to start with, so the cost to them is irrelevant.

And profits are always variable, but that doesn’t matter. No matter how much or little your profit margin happens to be, increased costs can always be passed on to the consumer.

20. collingreen ◴[] No.44511120{5}[source]
Thanks for the downvote!

I don't have any problem with the rule, which is why you dont see me arguing against it. I'm also not trying to change the laws by commenting on hn so your advice to not comment and instead call my reps comes off as pretty rude.

I do have a problem with the bad faith take of it costing a bunch of money to pay lawyers and data scientists in order to figure out how to "make it possible to cancel" including things like the examples of cancel buttons that literally don't work. Bad faith from the courts to undermine consumer friendly rules is worth discussion.

You may disagree with that and that's fine - happy to see a good faith response from you (but your goalpost moving requirement of updating all marketing doesn't meet the bar for me there) about why that cost might be higher than I expect. That might be an interesting convo.

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21. db48x ◴[] No.44511405{6}[source]
> Maybe you saw something in the quoted text that I didn't but I understood the USD100M to mean the costs that would arise due to companies who are currently utilising these practices stopping those practices.

No, Congress put in the hundred million rule to protect honest companies from overly–complicated rules meant to weed out the dishonest. The analysis is intended to force the FTC to consider alternative rules and pick the simplest one that will work.

As you point out, the dishonest companies aren’t going to bother following the rules, so new rules don’t impose any costs on them. Even Congresscritters can understand that.

> I would have hoped that, as well as considering what the costs are to the suppliers, the law might also have taken into account the size of the injury being suffered by consumers…

Yea, there’s an argument to be made in favor of that. You could contact your local Congresscritter and ask them to propose an amendment, but I would first consult the Congressional record to read up on the debate at the time the law was passed. I am sure something like this would have been proposed, and it might be useful to know why the law ended up the way it is. It might just have been simpler to get everyone to agree to a number than to a formula. Eliminating unnecessary complexity is the point, after all. I think this section was last amended in 1980, but I might be wrong…

22. db48x ◴[] No.44511487{6}[source]
> but your goalpost moving requirement of updating all marketing doesn't meet the bar for me there

I didn’t move the goalposts here. The new rules that are at issue here were about much more than just providing a button that cancels your subscription. See the actual text of the amendment to the rules <https://www.ftc.gov/system/files/ftc_gov/pdf/p064202_negativ...> if you don’t believe me. But I’ll quote the summary here:

    The Federal Trade Commission (“FTC” or “Commission”) issues final amendments to the Commission’s trade regulation “Rule Concerning Use of Prenotification Negative Option Plans,” retitled the “Rule Concerning Recurring Subscriptions and Other Negative Option Programs” (“Rule,” “final Rule” or “Negative Option Rule”). The final Rule now applies to all negative option programs in any media, and, among other things, (1) prohibits misrepresentations of any material fact made while marketing using negative option features; (2) requires sellers to provide important information prior to obtaining consumers’ billing information and charging consumers; (3) requires sellers to obtain consumers’ unambiguously affirmative consent to the negative option feature prior to charging them; and (4) requires sellers to provide consumers with simple cancellation mechanisms to immediately halt all recurring charges.
23. privatelypublic ◴[] No.44513326{3}[source]
Thank you! I haven't a way with words to explain this in such a way. I saw that the article quoted the opinion as being based on "they didn't do a study for more than $100m impact, and I find that unlikely.

It'd be interesting/debatable if this was a "look, this was never legal- now we're just painting a bullseye on people doing it- the 100m impact isn't needed" And the judge went with 100m impact anyway. But that's beyond what I know or care to participate in past throwing it out there as a talking point.

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24. db48x ◴[] No.44514603{4}[source]
You’re welcome.