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Telecom group sues to block FTC's 'click to cancel' rule
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Telecom group sues to block FTC's 'click to cancel' rule
Oct 23, 2024 9:50 AM

Oct 23 (Reuters) - An industry group representing cable

and internet providers sued along with two others on Wednesday

to block a U.S. Federal Trade Commission rule that requires

companies to offer simple cancellation mechanisms for

subscriptions.

NCTA - The Internet & Television Association and groups

representing the home security and online advertising industries

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.

The FTC finalized the rule on Oct. 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.

NCTA represents major cable and internet providers including

Charter Communications ( CHTR ), Comcast Corp ( CMCSA ), and Cox

Communications, as well as media companies such as

Disney Entertainment and Warner Bros. Discovery ( 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.

The 5th Circuit is a popular venue for business groups to

challenge agency actions. Twelve of the 5th Circuit's 17 active

judges were appointed by a Republican president, including six

by former President Donald Trump.

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