The new rule proposed by the Federal Trade Commission (FTC) generated widespread support, except from local gym owners and, notably, three federal judges. The rule aimed to allow the FTC to implement new regulations without extensive federal oversight if these rules were projected to have an economic impact of less than $100 million USD per year. Under the leadership of Democratic Chairwoman Lina Khan in 2023, the FTC believed this rule met that threshold. However, the panel of judges disagreed, concluding that businesses lacked sufficient time to prepare their cases prior to the rule’s anticipated enforcement on July 14.
As a result, the judges overturned the rule, allowing U.S. businesses to continue imposing cumbersome and time-consuming requirements for customers wishing to cancel easily initiated subscription services. Common practices include requiring customers to call a hotline for verbal confirmation, mailing certified letters, or, as it may feel, navigating absurd challenges just to cancel. The FTC does have the option to revise the rule and submit it for further federal review if it meets the economic impact threshold. However, given the current business-friendly conservative majority within both the Commission and the federal government, the chances of such a revision seem slim.
Even if the legal challenges against the Commissioners are resolved, the FTC’s capacity to counter corporate interests will be significantly restricted by the prevailing 3-2 majority. Consequently, Americans may find themselves continuing to navigate these frustrating cancellation processes for the foreseeable future, ultimately highlighting the ongoing struggle between consumer rights and corporate practices.