FTC Delays Subscription Cancellation Rule Implementation

FTC Delays Subscription Cancellation Rule Implementation

The US Federal Trade Commission (FTC) has delayed the implementation of a rule requiring businesses to make it as easy to cancel subscriptions and memberships as it is to sign up. The rule, initially set to take effect on May 14, will now begin enforcement on July 14.

Reasons for the Delay

  • The delay provides companies with additional time to comply with the new regulations.
  • The rule was created under former Democratic Chair Lina Khan, who defended it against a lawsuit claiming the agency exceeded its authority.

Reactions to the Rule

  • Consumer Groups: Welcomed the new rules as a means to protect consumers.
  • Business Associations: Filed lawsuits against the rules, arguing they exceed federal law and could harm small businesses.

FTC Leadership and Consumer Protection

Under the leadership of former President Trump, the FTC shifted towards balancing consumer protection with industry concerns about overregulation. This approach continues under the current leadership.

Statement from Alvaro Bedoya

Alvaro Bedoya, chair of the FTC, emphasized that despite the delay, the agency remains committed to protecting consumers from unfair subscription practices. He stated:

"This delay does not change our commitment to protecting consumers from unfair subscription practices."

Bedoya also mentioned that the FTC is working closely with stakeholders across industries, including major tech companies like Amazon and Google, to ensure compliance without causing unnecessary disruption.

Focus on Consumer Needs

In a recent interview with Bloomberg Television’s Emily Chang during the World Economic Forum Annual Meeting 2024 in Davos, Switzerland, Bedoya expressed his openness to how companies implement these changes but stressed the need for swift action. He noted that consumers are already facing high prices for services such as streaming and gym memberships.

He stated:

"We want people who are trying out these services for free or low cost not to be locked into contracts they don’t want."

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