The idea behind Click-to-Cancel is straightforward: if you can sign up with one click, you should be able to cancel with one click.
The FTC made that the law in 2024, requiring companies to clearly disclose terms, get explicit consent before billing, and offer cancellation that is just as easy as sign-up.
It did not last long. A federal appeals court overturned the rule in 2025, citing procedural errors under the Administrative Procedure Act, the law that governs how federal agencies write rules.
The problem was procedural. The FTC did not follow the required steps, and the court said that was enough to toss the rule.
Losing the rule did not slow the FTC down. It just switched to other legal tools.
The agency has kept going after subscription businesses using the federal ban on unfair or deceptive practices, known as Section 5 of the FTC Act.
It also uses the Restore Online Shoppers' Confidence Act, known as ROSCA. That 2010 law only covers online transactions, and it never defined key terms like "material terms" or "simple mechanism."
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Those setbacks haven't halted the FTC's efforts. It reached an $8.5 million settlement with Care.com, a childcare marketplace, for allegedly hiding terms, billing without consent, and making cancellation difficult.
It views subscription-related violations as a major enforcement priority, so the pressure is expected to continue.
In March 2026, the FTC launched an Advance Notice of Proposed Rulemaking, or ANPRM, which is a formal way to ask the public for input before writing a new rule. The subject is a 1973 rule that only covered prenotification plans.
That 1973 rule is ancient in internet years. It came before automatic renewals, continuity plans, and free-to-pay conversions, so it left big gaps.
The FTC wants to close those gaps, and comments are due April 13, 2026. Around 100 comments have come in so far.
The new rule could be broader than the 2024 version, and the FTC is not hiding its intentions.
Bureau of Consumer Protection Director Christopher Mufarrige said the agency is committed to "combating deceptive negative option subscriptions."
Negative option is the industry term for plans that keep billing you until you actively cancel - think gym memberships and streaming trials.
A reinstated rule would allow the FTC to pursue refunds for all affected consumers through Section 19 of the FTC Act. That means refunds for everyone affected, without having to prove "dishonest or fraudulent" conduct.
For anyone who has ever wrestled with a cancel button, this is good news. The FTC is not backing down, and close to 30 states have passed their own rules covering automatic renewals and negative options, some going further than federal requirements.
California, for example, requires businesses to send annual reminders with upcoming renewal dates, prices, and cancellation methods. If you live in a state with its own rules, you may already have more protection than the federal government offers.
For your portfolio, the takeaway is about risk. Subscription businesses are market favorites because recurring revenue is predictable, but that predictability comes with regulatory exposure.
If a new federal rule lands, companies that rely on tricky sign-up flows could face bigger refund orders and legal bills. The ones that depend on friction to keep revenue coming in have the most to lose.
For your money, the direction is good. Canceling a subscription should get easier, not harder, and the companies that make it difficult are the ones most exposed.
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