UPDATE NCTA-The Internet & Television Association and groups representing the home security and online advertising industries sued to block an FTC rule that requires companies to offer simple cancellation mechanisms for subscriptions. The FCC is considering the same rule for telephone, broadband, cable and satellite TV, Inside Towers reported.
The opponents said in papers filed with the 5th U.S. Circuit Court of Appeals in New Orleans that the rule known as “click to cancel” oversteps the FTC’s authority and was not supported by evidence. A spokesperson for the FTC declined to comment to Reuters.
The FTC finalized the rule on October 16, after considering thousands of comments from individuals, industry groups and consumer advocates. The Electronic Security Association, Interactive Advertising Bureau, and NCTA had filed comments criticizing the rule as overly broad, noted Reuters.
NCTA represents major cable and internet providers including Charter Communications (NASDAQ: CHTR), Comcast Corp (NASDAQ: CMCSA) and Cox Communications as well as media companies such as Disney Entertainment (NYSE: DIS), and Warner Bros. Discovery (NASDAQ: WBD).
The rule requires businesses to get consumers’ consent for subscriptions, auto-renewals and free trials that convert to paid memberships. The cancellation method must be “at least as easy to use” as the sign-up process.
It also prohibits requiring consumers who signed up through an app or a website to go through a chatbot or agent to cancel. For in-person signups, companies must provide means to cancel by phone or online.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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