←back to thread

US Court nullifies FTC requirement for click-to-cancel

(arstechnica.com)
572 points gausswho | 2 comments | 08 Jul 25 22:42 UTC | HN request time: 0.448s | source
Show context
ApolloFortyNine ◴[09 Jul 25 15:53 UTC] No.44511593[source]▶
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.

replies(11): >>44512527 #>>44512776 #>>44512973 #>>44513248 #>>44513526 #>>44514097 #>>44514150 #>>44514382 #>>44514507 #>>44514812 #>>44515256 #
didibus ◴[09 Jul 25 20:37 UTC] No.44514507[source]▶
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.
replies(1): >>44516738 #
1. db48x ◴[10 Jul 25 02:52 UTC] No.44516738[source]▶
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.

replies(1): >>44525849 #
2. didibus ◴[10 Jul 25 21:32 UTC] No.44525849[source]▶
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.