May 9 (Reuters) – The Federal Trade Commission is postponing the implementation of a rule that will take effect next week, which will require more readily businesses to cancel subscriptions and memberships in order to give companies more time to comply.
According to the announcement, the FTC will now start implementing the rule on July 14 and will take effect on May 14.
The FTC has laid out the rules under former Democratic chairman Lina Khan, but has since defended the lawsuit, claiming the agency is beyond its powers.
The move shows how the FTC under Donald Trump balances the focus of American consumers, who elected the Republican president’s commitment to deal with the high cost of living and complained to the business community that the agency has paid a tough attitude under Khan.
The FTC said the rule is based on dozens of law enforcement actions and thousands of consumer complaints.
The rule requires retailers, gyms and other businesses to obtain consent to free trials that subscribe, automatically renew and convert to paid membership. It says the cancel method must be “at least easy to use” as it is the same as the registration process.
The rule also prohibits consumers who register through an app or website from canceling it through a chatbot or agent. For in-person registration, the company must provide cancellation by phone or online.
The U.S. Chamber of Commerce and trading groups representing major cable and internet providers, such as Charter Communications, Comcast Corp and Cox Communications, as well as media companies such as Disney Entertainment and Warner Bros. Discovery, are among the people who are trying to stop the rule. (Reported by Jody Godoy in New York; Editor of Bill Berkrot)
