US Court nullifies FTC requirement for click-to-cancel

From the article

>"While we certainly do not endorse the use of unfair and deceptive practices in negative option marketing, the procedural deficiencies of the Commission's rulemaking process are fatal here,"

As with a lot of judge rulings, and what they're always supposed to do, they ruled on what the actual law is and not just on what sounds good.

>The FTC is required to conduct a preliminary regulatory analysis when a rule has an estimated annual economic effect of $100 million or more. The FTC estimated in a Notice of Proposed Rulemaking (NPRM) that the rule would not have a $100 million effect.

Basically the judges, and a lower court, all agreed that there's no way this rule won't have at last a $100 million in impact, and when something has that much impact there are rules they were meant to follow and didn't. And they rightly commented that if this was allowed to stand, the FTC and every government agency would just always estimate low in these cases.

It’s a pro business anti consumer supreme court which knows it’d be dangerous to appear that way. Government and court will hamstring their ability to help consumers.

My favorite comment on HN was some law student saying his prof said “Scalia is the most complicated supreme court member whose views are always unpredictable” and the commenter said “he’s just a corporate hack who always votes for corporations and backs it up” and sure enough he guessed every ruling correctly.

> they rightly commented that if this was allowed to stand, the FTC and every government agency would just always estimate low in these cases.

I think you missed this — it isn’t some arbitrary reason to rule in an anti-consumer way. There is good reason to do so. Imo we should keep our checks and balances strong, and this is one small action that does that.

>> It’s a pro business anti consumer supreme court

Maybe? But this wasn't the supreme court: "...was vacated by the US Court of Appeals for the 8th Circuit."

> Imo we should keep our checks and balances strong

I think the tense of this sentence is not quite right. Something more like "Make checks and balances strong again" would work.

$100 million or more rule seems silly when that's the cost of ~10 stoplights and there are like 33 million businesses in the US.

But it also seems ridiculous to skip since four people doing nothing but having a discussion about a new rule for 30 minutes across a good portion of those businesses is easily $100mil w/o them even having to lift a pinky besides.

Haha, ya I agree with that too

>$100 million or more rule seems silly when that's the cost of ~10 stoplights and there are like 33 million businesses in the US.

A minute of internet research suggests that specific $100m figure is from a 45-year-old law[1]. I don't know why every government law and regulation that references specific monetary values like this aren't pegged to inflation. That equivalent value today is almost $400m.

EDIT: Actually the number might come from a 29-year-old amendment[2]. It is disappointing how hard it is to track these things down.

[1] - https://www.nrc.gov/about-nrc/regulatory/rulemaking/flexibil...

[2] - https://www.congress.gov/bill/104th-congress/senate-bill/942

I don't buy that argument. The issue is companies deliberately built complexity on top of their existing systems to make it harder to cancel. The added complexity that costs a lot of money to fix is a result of their unfair and deceptive practices.

An enormous amount of deadweight loss would be returned to the economy if they simply implemented a much simpler design of click to cancel and avoided the unfair and deceptive practices in the first place.

Isn't the argument that making it easier to cancel subscriptions means that more customers will cancel and the cumulative effect across the industry will be much more than $100M?

No, I think that the $100M number comes from the cost of implementing the change, not the impact to the impacted companies' bottom line.

Seems that the hard coded fixed dollar amount argument can apply everywhere, see small claims court maximums.

Wait, a stoplight costs $10 million?

I think the other person is right… the term is “economic impact” not “cost to implement”

Not to mention > $10K financial transaction disclosures

That's what I thought too, but from the ruling in the article, it seemed like the justification came from calculating the cost to implement (emphasis on 'compliance costs'.

> But an administrative law judge later found that the rule's impact surpassed the threshold, observing that compliance costs would exceed $100 million "unless each business used fewer than twenty-three hours of professional services at the lowest end of the spectrum of estimated hourly rates," the 8th Circuit ruling said.

maybe that includes the software and hardware to run the stoplight, the salaries of the operators and maintenance etc and their admin staff, and the all the analysis to figure out when it should be red/green, all that stuff.

Of course anything that benefits the consumer will affect business revenue. That's the whole point!

No, it absolutely does not.

No they don't. I'm not sure where they got that number from, but it's either wrong or being misrepresented (costs of entire infrastructure project confused with cost of lights). $10M is off by 1-3 orders of magnitude, depending on if you're counting installation of just one signal or a complete intersection.

It's conceivable for the installation of traffic lights in a remote place to be an expensive project if there's no power available there, but that's a much larger project than just a single traffic light.

While the courts, supposedly, focus on what the law actually says, remember that Wickard v Filburn (1942) established that growing a plant on your own property for your own personal use is "interstate commerce".

I don't know a lot about law, but I at least know that ruling on what the "actual law is" is selective, and usually selective in a way that is beneficial for the rich and powerful.

Why would anyone be concerned with the industry vs the economy? Especially when it’s an industry engaged in foul play?

Any dollar “lost” as a result of customers being able to cancel results in customers gaining more money to empower industries that are actually productive.

> ruling on what the "actual law is" is selective

US judges are not fact-checked and may rely on whatever selection of information presented in amicus briefs (as-filtered by 20-something year old law clerks trying their best) seems applicable.[1]

This seems relevant here because the mentioned figure seems to be "compliance costs" (cost to implement), not the cost on the bottom line of each org. It's very possible that that cost still exceeds $100,000,000, but it does leave more discretion in the hands of the judges than the GP would seem to imply, and more room for judges to listen to inflated estimates of cost.

Acknowledging that there's still something to be said about erring side of caution, but also that there's something to be said about what a ridiculous limit $100Mil is in 2025.

[1]: https://www.propublica.org/article/supreme-court-errors-are-...

That is a decent argument against the law requiring the analysis, but it is not a good argument that judges should let the FTC violate the law.

Well, the two are related. By definition, the economic impact must be at least as much as the cost to implement. So estimating the cost to implement sets a lower bound on the total economic impact.

Sure, and I can make an argument that John's Window Breaking and Repair Services, LLC is performing a public good by stimulating economic activity.

So we have some cases where the courts follow the rule of law, and others where the stretch reality to come to insane but convenient conclusions, like in your example.

You're right, it's absolutely applied selectively. But, while it would be nice to have an insane, illegal, but convenient conclusion in our favor, that does not mean we should criticize the courts for following the rule of law rather than coming to an insane, illegal conclusion.

There are always reasons on both sides of a case

> As with a lot of judge rulings, and what they're always supposed to do, they ruled on what the actual law is and not just on what sounds good.

There is reasonable room for disagreement about "what they're always supposed to do." Legal pragmatism is a prominent theory in American law.

From what we’ve seen recently, the federal government and federal agencies are no longer following the law, not even the constitution. I’m not sure what makes this case unique.

The problem is that if the courts only follow the rule of law some of the time then one must consider the possibility that these selective applications of the law are in service of some extra-legal agenda, in which case the fact that this agenda occasionally aligns with the law doesn't change the fact that the judges are in fact operating with compete disregard for the law except as it occasionally offers the opportunity to cover up their real motives.

> As with a lot of judge rulings, and what they're always supposed to do, they ruled on what the actual law is and not just on what sounds good.

A "lot" of judicial rulings do indeed follow that pattern. But there have been mulitple high-profile & high-stakes examples recently of just the opposite. To the point where I thought you were making a joke at first.

so, small questionable wins for normal people would break the system while big, veeeeerrrrry questionable wins for some subset of the elite are OK?

YEAH!

NO PART OF THE GOVT SHOULD EVER VIOLATE THE LAW!

YOU TELL 'EM, BUDDY!

What's dumb is that no one cares about the 100 million+ that customers lost in paying for extra months of subscriptions they didn't use. I feel there should be counteracting rule, like, if customers impact is X$$ than it doesn't matter what the business loss is, or maybe whichever is higher win, I don't know.

And corporations are people...

"No longer?!"

From wikipedia:

In July 1940, pursuant to the Agricultural Adjustment Act (AAA) of 1938, Filburn's 1941 allotment was established at 11.1 acres (4.5 ha) and a normal yield of 20.1 bushels of wheat per acre (1.4 metric tons per hectare). Filburn was given notice of the allotment in July 1940, before the fall planting of his 1941 crop of wheat, and again in July 1941, before it was harvested. Despite the notices, Filburn planted 23 acres (9.3 ha) and harvested 239 more bushels (6,500 kg) than was allowed from his 11.9 acres (4.8 ha) of excess area.

I don’t agree with the ruling or implications of this case, that said it was a clear ruling of technicalities.

Doesn't mean much when "rule of law" is just a polite way of stating "for my friends everything, for my enemies the law"

Depends where it is. On a military base they can be $100M.

Simply because a court followed the letter of the law doesn’t make its decision just. Unjust societies from time immemorial have utilized courts to legitimize all sorts of rotten things.

Claiming that the court is right to throw consumers under the bus based on a technicality misses the fact that the primary function of the legal system in our society is serving the capitalist class. In fact what we see here is not some impartial determination but the court fulfilling its structural purpose by betraying consumers for business profits.

Obviously I agree with you morally speaking but apparently the law doesn't.

If this $100 million in impact rule is the reason for the judgement, wouldn't that suggest that a scam that takes in more than $100 million would be protected?

That's essentially what these businesses are doing. They're taking money from people who either don't want their product, or didn't realize that they'd be charged continuously.

Just yesterday I cancelled a service, they made it very simple, until I read the very small print that said "this service is paused for 1 month". I didn't want a pause, I wanted a cancel, but how many people are being caught out by this.

I emailed them, and the CEO replied that they are changing this policy. I'll try to follow up on that in a month, but I'm not believing this on face value.

Good point. Also note that Interstate Commerce is a bit of a special case. It's sort of the exception that swallows the rule. The Supreme court went for decades without ruling against the feds on the interstate commerce issue. US v. Lopez (1995)(possessing a gun in a school zone) was a rare case where the Supremes said something was not within the bounds of interstate commerce.

> If this $100 million in impact rule is the reason for the judgement, wouldn't that suggest that a scam that takes in more than $100 million would be protected?

No.

The $100 million rule doesn't say that things with more than $100 million in impact cannot be regulated. It just says that more analysis is required when regulating such things.

The 8th Circuit has an even more conservative composition than SCOTUS:

https://en.wikipedia.org/wiki/United_States_Court_of_Appeals...

Case was decided by Loken (GHW Bush), Erickson (Trump), and Kobes (Trump).

This ruling regarding the FTC requirement states the court's understanding of the purpose and import. I think it's also important to acknowledge the very practical outcome of bypassing it. Future legislation will understate the impact of changes citing precedent.

> I don't know why every government law and regulation that references specific monetary values like this aren't pegged to inflation.

It's an utter mess. This job falls primarily to the Bureau of Labor Statistics, who compiles the basket of goods that make up the Consumer Price Index - but this doesn't include food or fuel, for example.

The Bureau of Economic Analysis also maintains several indices which are used as inflation proxies when it's convenient (and which are most often used by the various working groups within the federal reserve system to, eg, determine interest rates). But these are somewhat more volatile and more subject to fluctuations due to international political affairs, etc.

The most obvious metric - the literal inflation in the money supply - is also tricky because the process by which money is created is so baroque.

The ability to have more coherent laws which reference amounts of money is a good reason to adopt sounder and more transparent practices in monetary policy.

You might be misunderstanding the purpose of the hundred million dollar rule. It is an arbitrary threshold, that’s true; any threshold would be. But what it triggers is just an extra step that the FTC must go through where they receive suggestions from the public, including the industry to be regulated, for _alternatives_ to the proposed rules. They must then go through and determine for each of the alternatives whether it would be effective at achieving the goal of the new regulation, and if so whether it would be cheaper to implement than the proposed rules. If it would be both effective and cheaper to implement, then the FTC is supposed to drop their own proposed rules and adopt the alternative rules instead.

So for example if the proposed rules said that everyone selling any kind of subscription must do X, Y, and Z, and Z was pretty expensive, then you might write in and suggest doing W instead of Z. If W would be effective and cheaper to implement than Z, then the FTC is supposed to change their proposed rules to require everyone to do X, Y, and W instead.

There's just not much reason for this step to depend on how much fraud the new rules would prevent. The public comment period and the analysis steps only take a few months, and in the grand scheme of things a few months is not much time at all.

In my country politicians do not appoint judges. The separation of the branches of power and all that...

But I will say that having independent justices who constantly fuck up your government plans can be exhausting.

Note especially that the hundred million dollar rule is about the amount of impact _of the new rules_, not the impact of the fraud that they’re trying to deter. The extra steps that they must go through are all about finding alternative rules that would be cheaper to implement, using suggestions from the public and the regulated industry.

No, it is only cost to implement the new rules. If this cost is estimated to be above one hundred million dollars, then extra review steps are required. These steps allow the public, and the regulated industry, to suggest alternatives. These alternatives must be evaluated to see if they would be both effective and cheaper for legitimate businesses to implement. If they are, then the FTC is supposed to drop their own proposed rules and adopt the alternative rules instead. This keeps the rules themselves from hurting legitimate businesses; the illegitimate businesses aren’t going to follow the rules anyway.

I had in mind a project in my area a few years back where redoing a four way major intersection was quoted like that, not actually one literal stoplight just purchased and delivered.

I was thinking of a project that redid a four way intersection.

I don't understand the point in raising these specific practical objections like my simple comment was intended to be the text of the legislation. There are all sorts of ways these issues can be addressed like pegging it to a specific index of inflation and have it run on a long delay to allow full transparency and predictability.

It sort of does mean that. If the courts selectively rule in favor of one class, and we can’t do anything about it, then the best thing to do may absolutely be to encourage selective rulings against them.

I see why you say that, but I prefer the long term results of fighting against insane rulings when they're bad, rather than the long term effects of fighting for insane rulings on the occasions that I find them convenient.

A few months added to all the subscriptions people are paying for and not using could easily surpass 100+ million in lost customer money. I'd still venture it makes sense to have a counter party looking at the financial harm to the public, and not just the companies.

Do you not think that corporations are composed of people who have rights?

I don’t think we can successfully fight insane rulings in the near future. It’s on the same order as getting money out of politics; disagrees completely with the current incentives of the system and would require a massive political push. It seems to me that the system is working as intended in allowing insane rulings, and that we should attempt to use that to our advantage, since the powerful absolutely will continue to do so and there’s basically jack shit we can do about it right now.

sure bud .. wake the fck up