A significant consumer protection measure that would have compelled streaming services to streamline their cancellation procedures was overturned by a US federal appeals court. The Federal Trade Commission (FTC) recommended the rule, which is referred to as the "click to cancel" rule, and it will go into effect on July 14.
Companies including Netflix, Prime Video, Disney Plus, and HBO Max would have had to make canceling subscriptions as simple as registering. By requiring platforms to reveal when promotional pricing would expire and obtaining explicit approval before turning free trials into paid plans, the law also sought to improve transparency. It was a component of the Biden administration's larger initiative to enhance wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital services and lessen consumer friction.
The FTC did not, however, carry out the required economic impact analysis prior to implementing the regulation, the appeals court decided. Consequently, streaming businesses are not required to maintain user-friendly cancelation mechanisms, and the law has been postponed indefinitely.
Flexibility at Risk for Streaming Subscribers
Even though many streaming services today let customers cancel with a few clicks, industry watchers caution that without governmental monitoring, this may quickly change. Platforms may decide to add more steps, hide the cancellation option in the account settings, or even mandate that customers contact customer service.
We have already seen such strategies. According to a 2023 inquiry, canceling amazon Prime Video required going through four different sites, clicking six times, and answering fifteen different prompts. Because of this, the FTC then filed a lawsuit against amazon, which is still pending.
Why indian Subscribers Should Pay Attention
Even though the court's decision only pertains to the US, it may have an impact on international customs, including those in India. The ability to quickly cancel and resubscribe is crucial for many users, especially in price-sensitive areas, in order to control the growing expenses of streaming.
The average US household now spends about $61 (roughly ₹5,000) a month on streaming services, according to Deloitte, a trend that is also seen in other significant economies.
Indian users may soon find it more difficult to opt out of platforms they no longer use if businesses choose to standardize more complicated cancellation procedures across regions, which might lead to increased monthly expenses.
Consumer rights activists are advising people everywhere to be aware of the terms and conditions pertaining to wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital subscriptions as the legal and regulatory environment changes.
Companies including Netflix, Prime Video, Disney Plus, and HBO Max would have had to make canceling subscriptions as simple as registering. By requiring platforms to reveal when promotional pricing would expire and obtaining explicit approval before turning free trials into paid plans, the law also sought to improve transparency. It was a component of the Biden administration's larger initiative to enhance wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital services and lessen consumer friction.
The FTC did not, however, carry out the required economic impact analysis prior to implementing the regulation, the appeals court decided. Consequently, streaming businesses are not required to maintain user-friendly cancelation mechanisms, and the law has been postponed indefinitely.
Flexibility at Risk for Streaming Subscribers
Even though many streaming services today let customers cancel with a few clicks, industry watchers caution that without governmental monitoring, this may quickly change. Platforms may decide to add more steps, hide the cancellation option in the account settings, or even mandate that customers contact customer service.
We have already seen such strategies. According to a 2023 inquiry, canceling amazon Prime Video required going through four different sites, clicking six times, and answering fifteen different prompts. Because of this, the FTC then filed a lawsuit against amazon, which is still pending.
Why indian Subscribers Should Pay Attention
Even though the court's decision only pertains to the US, it may have an impact on international customs, including those in India. The ability to quickly cancel and resubscribe is crucial for many users, especially in price-sensitive areas, in order to control the growing expenses of streaming.
The average US household now spends about $61 (roughly ₹5,000) a month on streaming services, according to Deloitte, a trend that is also seen in other significant economies.
Indian users may soon find it more difficult to opt out of platforms they no longer use if businesses choose to standardize more complicated cancellation procedures across regions, which might lead to increased monthly expenses.
Consumer rights activists are advising people everywhere to be aware of the terms and conditions pertaining to wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital subscriptions as the legal and regulatory environment changes.
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