The U.S. Federal Trade Commission (FTC) has approved a “click-to-cancel” rule that is expected to change the way companies handle subscription cancellations.
This provision takes effect 180 sky The FTC announced on Wednesday (October 16) that it will require companies to streamline the cancellation process to facilitate registration after publication in the Federal Register.
The change is huge for the music streaming giant Spotify, apple musicand Amazon musicwhich together serve hundreds of millions of subscribers in the United States and around the world. These platforms need to ensure that the process of unsubscribing is at least as easy as the registration process.
The rule is intended to address what the FTC calls “deceptive practices” in subscription services where consumers often face complicated cancellation procedures despite simple sign-up processes.
“Businesses often make people go to great lengths just to cancel their subscriptions,” the FTC chairman said. Lena M. Khan. “The FTC’s rules will end these shenanigans and traps and save Americans time and money. No one should have to pay for services they no longer want.
The new rules also prohibit companies from misrepresenting material facts when using “negative option marketing,” failing to clearly disclose terms before collecting billing information, and charging consumers without their informed consent.
“Too often, companies put people through hoops just to cancel their subscriptions. The FTC’s rule will end these tricks and traps, saving Americans time and money.
Lina M. Khan, Federal Trade Commission
The committee said its decision follows extensive public consultation, 16,000 Comments from the public, including consumers, government agencies, and industry groups. The final rule represents an update to the Federal Trade Commission 1973 Negative Option RuleThe Federal Trade Commission said it is adjusting regulations to adapt to today’s digital economy.
Recent data shows a significant increase in subscription-related complaints, with the Federal Trade Commission (FTC) receiving nearly 70 Daily consumer complaints will increase in 2024 42 Every day in 2021.
The FTC first proposed new “click-to-cancel” rules in March 2023. Commission approves final rule 3-2 vote.
Companies found to be in violation of the new rules could face penalties and enforcement action.
The new rules mirror similar developments in South Korea, where its counterpart at the Federal Trade Commission has taken aim at the subscription practices of streaming giants such as Spotify. As early as August, it was reported that the Korea Fair Trade Commission had sent inspection reports to five major OTT and music streaming platforms, claiming that they did not provide users with the ability to terminate their subscriptions during the billing cycle or failed to inform consumers Their refund rights.
These companies include Netflixof Korean subsidiaries and Spotify Koreaand local video streaming platforms Pov and Waka Inc. and music streaming platforms NHN Bugs Company.
global music business
