Eighth Circuit Vacates FTC’s “Click-to-Cancel” Rule — But the Fight Isn’t Over for Negative Option Compliance
On July 8, 2025, just days before enforcement was set to begin, the U.S. Court of Appeals for the Eighth Circuit vacated the Federal Trade Commission’s “Click-to-Cancel” Rule — officially known as the Rule Concerning Subscriptions and Other Negative Option Plans. The court’s decision came in response to consolidated petitions challenging the rule’s scope, legality, and procedural underpinnings. While the rule faced several lines of attack, the Eighth Circuit ruled decisively on procedural grounds, holding that the FTC failed to conduct the required preliminary regulatory analysis after underestimating the rule’s economic impact. Specifically, the FTC initially claimed the rule would impose less than $100 million in annual compliance costs — a critical threshold for determining whether additional economic analysis is required. Even after an administrative law judge later concluded in April 2024 that the rule would exceed that impact, the agency declined to revise its approach or provide the required analysis. This procedural misstep proved fatal. In their dissent from the rule’s final issuance in November 2024, now-Chairman Andrew Ferguson and Commissioner Melissa Holyoak criticized the rulemaking as a “race to cross the finish line” that attempted to apply broad consumer protection mandates to the “entire American economy.” The Eighth…
