This only serves to allow firms to erect effort barriers to keep rent seeking fro their customers. The "gotcha" that the Khan FTC didn't "follow the rules making process" is parallel construction.
It doesn't seem that farfetched to me to imagine two sites offering equivalent services, one at $5/month and the other at $6/month, with the only difference being the $6/month site offers click to cancel. This dollar price difference is often the difference between the life and death of a company.
A harsher way of phrasing it would be this serves the consumer who actually pays attention to their bills. I've had a cheap gym membership sitting around for a few months that I haven't gone to. I don't want to go to the effort of cancelling it, because that's hard. My sloth subsidizes the gym goers who actually do use the service every day and pay less than they otherwise would for the privilege. Poor, lazy, stupid people like me should still be given the option to spend our money in poor, lazy, stupid ways.
Companies pay attention to what their competitors are doing. If everyone is doing it, they'll happily go along with it.
The other issue is that if these things are guaranteed in law, they have a nasty habit of simply disappearing. A great example of that is ads in paid streaming services. In the beginning, you paid for the service and no ads. But then hulu came along and had ad content for the lower tier. That started a chain reaction on the other streaming platforms where now they all do ads for paid content. They are even toying with not allowing a higher payment to opt out of ads (which will likely come).
Click to cancel would be the same way. You might sign up for something with a click to cancel feature, there is absolutely nothing from stopping a company from quietly removing that option. Just like nothing has stopped companies from requiring phone calls, at the right time, in the right manor, and with a 20 step Q/A retention process. Bad enough that you can now pay people to sit through retention processes to cancel for you.
We can get pretty close. Take Adobe versus Affinity. Same industry, very similar product suites, but totally different pricing strategies, and Adobe makes cancellation much more annoying.
There are plenty of examples of this if you keep your eyes open. I'm pretty sure the only reason I don't have an exact example to give you is because I'm under NDA and I don't watch most consumer retail enough to know.
>Companies pay attention to what their competitors are doing. If everyone is doing it, they'll happily go along with it.
Tacit collusion becomes exponentially more difficult to maintain in any market with more than a handful of players. A different pricing strategy is one of the easiest ways to counterposition against an incumbent there is. It's part of how SaaS toppled bubble wrap CDs in the first place.
That can be lower pricing with the same model, or it can be a one time purchase versus a subscription, or it can be a hard to cancel but very cheap subscription over a very expensive one time purchase.
> In the beginning, you paid for the service and no ads. But then hulu came along and had ad content for the lower tier. That started a chain reaction on the other streaming platforms where now they all do ads for paid content.
People are more willing to pay $10 per month with ads than $12 per month without ads. I don't find that especially shocking. The market figures out what people actually want, not what people say they want.
Say it were not so. Then we would see some Netflix renegades start a new streaming platform that is Ad Free Again™ and only a tiny bit more expensive than the competitors, and most consumers would switch. It's not impossible, but I haven't seen that happen yet.
>You might sign up for something with a click to cancel feature, there is absolutely nothing from stopping a company from quietly removing that option.
If I care enough about the feature and this price differential, I'll notice this and eventually go through the aggravation of cancelling to switch to a new, slightly higher priced service which does have click to cancel. I paid more for the easy cancellation promise and when it was revoked the service became less valuable to me. Whatever, it was fun while it lasted. A monthly subscription to Netflix is not a marriage, and it is not an investment.
People do it all the time, at all levels of scale and severity. You might as well take issue with the US government not having a "click to cancel" option on NATO or something.
It's not click to cancel, but... airlines will charge extra for the right to cancel with a refund. Cheapest ticket is non-refundable, higher priced in refundable. But these are finite resources - seats, dates/times, etc. Not infinite capacity SaaS platforms.
This isn't about cancellation fees, a fixed-term commitment, or anything of the sort. It's agreeing that "you can cancel by filling out the form" without mentioning that to get the form you need to climb down into an unlit basement, and find the form in a maze of unlabeled filing cabinets while evading the guard leopard.
You're always paying a fee somewhere to hedge against cancellation risk somewhere in the system. There is no free lunch. It's either going to be in the asking price or at the tail end. You can force everyone to raise their asking price and hence price millions of people out of Netflix for every $1/month you go up, or you can let people self-select.
Options provide value to the purchaser even when they are not exercised. It is a common but grave error to model options the same way one would model a simpler pay-per-usage style service for that reason. We might as well start telling people they can't buy monthly bus passes if they don't use them every day.