Silent Verdicts, Sticky Subscriptions: How the Fifth Circuit Undid the FTC’s Unsubscribe Revolution
By Contributor Kevin B
For millions of Americans, canceling a digital subscription feels less like clicking a button and more like solving a bureaucratic puzzle designed by Kafka. From buried “Contact Us” forms to phone call requirements that magically disappear outside business hours, the friction is intentional. It’s not merely annoying—it’s engineered to exploit inertia, turning reluctant auto-renewals into revenue goldmines.
So when the Federal Trade Commission announced its “Click to Cancel” rule in 2023—requiring companies to make canceling subscriptions as easy as signing up—it was hailed as a long-overdue intervention. But in July 2025, that intervention hit a wall. A three-judge panel from the Fifth Circuit Court of Appeals quietly kneecapped the FTC’s regulatory push, ruling that the agency lacked authority to enforce such sweeping consumer protections under its existing mandate.
The court’s decision didn’t arrive with fanfare. No press conference. No dramatic oral arguments. Just a subdued docket entry with outsized consequences: the rule was dead, the FTC defanged, and corporate America was free to keep playing hard to quit.
The Case That Changed Everything
At the heart of the ruling was a legal challenge brought by a coalition of business groups, including representatives from digital media, fitness chains, and online retailers. They argued that the FTC’s new rule—part of a broader “Unfair or Deceptive Acts or Practices” update—exceeded the agency’s statutory authority.
The judges agreed.
In their opinion, the panel contended that the FTC had crossed from enforcing existing law to creating new law—something they argued only Congress could do. By mandating specific design standards for cancellation interfaces (like requiring a single click), the rule, in their view, rewrote the balance between regulators and industry.
The Fifth Circuit’s stance reflects a broader judicial trend known as the “major questions doctrine,” which holds that federal agencies must have clear congressional authorization to enact rules that carry vast economic or political significance. Critics of the doctrine argue it amounts to judicial policymaking, selectively limiting regulatory reach in favor of corporate interests.
In practice, the ruling renders the FTC’s attempt to make consumer cancellation easier legally toothless. While the Commission can still bring enforcement actions for deceptive practices on a case-by-case basis, it can no longer enforce standardized cancelation pathways.
What the Rule Was Trying to Fix
Before being struck down, the FTC’s Click to Cancel rule targeted a slew of manipulative practices, including:
- Digital labyrinths: Users forced to navigate multi-page menus or locate obscure “account settings” to cancel.
- Dark patterns: Interfaces designed to confuse, delay, or discourage cancellation—such as hiding the cancel button in hard-to-read text or placing it behind a misleading prompt.
- Offline detours: Companies requiring phone calls or mail-in requests to cancel digital services.
- Guilt prompts: Framing cancellation as disloyalty—“Don’t you care about supporting creators?”—or threatening lost progress: “All your data will be deleted!”
The rule proposed a fix: one-click cancellation, opt-out symmetry (meaning if you signed up online, you could cancel online), and a ban on manipulative retention tactics unless a user voluntarily engaged.
It was consumer-first, tech-savvy, and legally targeted toward ending what the FTC Chair Lina Khan called “subscription traps.” Now, all of it sits in legal limbo.
The Political Undercurrents
This wasn’t merely a fight over interface design—it was a proxy war over agency power. The Fifth Circuit, considered one of the most conservative appellate courts in the country, has increasingly become the venue of choice for legal challenges aiming to rein in federal agencies.
Its decision in this case aligns with a broader campaign to limit executive branch oversight, particularly in matters touching on economics, technology, and consumer rights. And it’s part of a swelling movement among industry groups and conservative legal activists to reassert judicial control over the administrative state.
To critics, the ruling is a stealthy blow against public accountability. Not because the court made a splashy statement—but precisely because it didn’t. No dramatic oral arguments. No dissenting opinion. Just a cold deletion of consumer protections in a footnote-heavy ruling.
Who Wins, Who Loses
- Subscription-based businesses: From streaming giants to gym memberships, the industry stands to maintain friction-based retention strategies that increase profits.
- Legal firms specializing in deregulation: The precedent opens doors for challenging similar rules across other agencies, from the CFPB to the SEC.
Winners:
- Consumers: Especially vulnerable populations, like the elderly or those with limited tech literacy, who are more likely to struggle with complex cancellation systems.
- The FTC: Its ability to proactively shape consumer experience has been clipped, reducing it to a reactive body chasing bad actors after harm has already occurred.
- Tech accountability advocates: The decision halts momentum toward transparent user interfaces and rights-based design.
Losers:
The Subtext of “No Clicks”
One of the more disturbing elements of this ruling is how it subtly reinforces asymmetric power. While corporations can change terms of service unilaterally and manipulate UI flows at scale, individual users must hunt, click, and often plead to cancel. The decision effectively codifies imbalance.
Worse, it sends a chilling message: unless Congress spells out every detail of consumer protection, federal agencies may be hamstrung—even when the harm is digital, fast-moving, and widespread. In this paradigm, laws written in the analog era must micromanage solutions for problems born in the algorithmic one.
It’s a bureaucratic mismatch, and it leaves consumers exposed.
Reactions from the Field
Consumer advocacy groups, including Public Citizen and the Electronic Privacy Information Center, denounced the ruling as “judicial sabotage dressed as procedural restraint.” Meanwhile, business groups like the Chamber of Commerce heralded it as a “victory for regulatory clarity.”
Inside the FTC, frustration brewed. Though no official response has been issued, staff insiders expressed concern that the ruling undermines the agency’s ability to fulfill its statutory mission. For Khan, who has made tech accountability a cornerstone of her tenure, the ruling is both personal and political.
Some legal experts argue the FTC could appeal or work with Congress to reauthorize its powers more explicitly. But that could take years—during which companies will continue deploying friction as a revenue strategy.
What This Says About the Future of UX (User Experience) and Power
At its core, this case isn’t just about rules. It’s about who gets to define fairness in the digital age. For decades, regulators could interpret broad mandates like “unfair practices” to respond to evolving harms. But under the major questions doctrine, that flexibility is vanishing.
Today’s ruling says: if fairness isn’t spelled out in statute, it may as well not exist.
This has implications beyond subscriptions. It touches everything from algorithmic pricing and hidden fees to biometric data practices. If federal agencies can’t act unless Congress pre-legislates every harm, our system becomes rigid—and companies become emboldened.
Interface design isn’t neutral. It’s a policy decision. And without regulatory oversight, those decisions tilt toward extraction.
What’s Next?
While the FTC’s rule may be dead for now, the fight for friction-free cancelation isn’t over. Expect consumer groups to lobby Congress for clearer statutory language, and some states may attempt their own legislation—creating a patchwork of cancellation standards nationwide.
Meanwhile, digital media watchdogs and investigative journalists may play a key role in naming and shaming the worst offenders. Already, some platforms like [Name Redacted] have seen subscription backlash after reports revealed deceptive practices.
For users, the best weapon remains transparency—platforms that allow easy cancelation should be rewarded, and those that don’t should be exposed.
Thank you for visiting our article, This is an important issue with multiple consequences, more to come!
