By Jody Godoy
(Reuters) -A U.S. appeals court blocked a rule that would have required businesses to make it as easy to cancel subscriptions and memberships as it is to sign up, saying the agency that created it did not follow protocol.
The U.S. Federal Trade Commission, which passed the rule under former Democratic Chair Lina Khan, failed to conduct a preliminary analysis of the costs and benefits of the rule, said the 8th U.S. Circuit Court of Appeals in St. Louis. The rule was set to take effect on July 14.
A spokesperson for the FTC declined to comment on Tuesday.
The rule would have required retailers, gyms and other businesses to provide cancellation methods for subscriptions, auto-renewals and free trials that convert to paid memberships that are “at least as easy to use” as the sign up process.
It also aimed to keep companies from making consumers who signed up through an app or a website go through a chatbot or agent to cancel.
The U.S. Chamber of Commerce and a trade group representing major cable and internet providers such as Charter Communications, Comcast, and Cox Communications, and media companies like Disney Entertainment and Warner Bros. Discovery are among those suing to block the rule.
(Reporting by Jody Godoy in New York; Editing by Sonali Paul)
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