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US Court nullifies FTC requirement for click-to-cancel

arstechnica.com

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Re: US Court nullifies FTC requirement for click-to-cancel

#531

Post by Supermancho »

tshaddox wrote: post #484
ApolloFortyNine wrote: post #346

From the article >"While we certainly do not endorse the use of unfair and deceptive practices in negative option marketing, the procedural deficiencies of the Commission's rulemaking process are fatal here," As with a lot of judge rulings, and what they're always supposed to do, they ruled on what the actual law is and not just on what sounds good. >The FTC is required to conduct a preliminary regulatory analysis wh…

> As with a lot of judge rulings, and what they're always supposed to do, they ruled on what the actual law is and not just on what sounds good. There is reasonable room for disagreement about "what they're always supposed to do." Legal pragmatism is a prominent theory in American law.

This ruling regarding the FTC requirement states the court's understanding of the purpose and import. I think it's also important to acknowledge the very practical outcome of bypassing it. Future legislation will understate the impact of changes citing precedent.

Re: US Court nullifies FTC requirement for click-to-cancel

#532

Post by jMyles »

slg wrote: post #423
Glyptodon wrote: post #412

Earlier quoted context omitted.

$100 million or more rule seems silly when that's the cost of ~10 stoplights and there are like 33 million businesses in the US. But it also seems ridiculous to skip since four people doing nothing but having a discussion about a new rule for 30 minutes across a good portion of those businesses is easily $100mil w/o them even having to lift a pinky besides.

>$100 million or more rule seems silly when that's the cost of ~10 stoplights and there are like 33 million businesses in the US. A minute of internet research suggests that specific $100m figure is from a 45-year-old law[1]. I don't know why every government law and regulation that references specific monetary values like this aren't pegged to inflation. That equivalent value today is almost $400m. EDIT: Actually th…

> I don't know why every government law and regulation that references specific monetary values like this aren't pegged to inflation.

It's an utter mess. This job falls primarily to the Bureau of Labor Statistics, who compiles the basket of goods that make up the Consumer Price Index - but this doesn't include food or fuel, for example.

The Bureau of Economic Analysis also maintains several indices which are used as inflation proxies when it's convenient (and which are most often used by the various working groups within the federal reserve system to, eg, determine interest rates). But these are somewhat more volatile and more subject to fluctuations due to international political affairs, etc.

The most obvious metric - the literal inflation in the money supply - is also tricky because the process by which money is created is so baroque.

The ability to have more coherent laws which reference amounts of money is a good reason to adopt sounder and more transparent practices in monetary policy.

Re: US Court nullifies FTC requirement for click-to-cancel

#533

Post by db48x »

didibus wrote: post #500
ApolloFortyNine wrote: post #346

From the article >"While we certainly do not endorse the use of unfair and deceptive practices in negative option marketing, the procedural deficiencies of the Commission's rulemaking process are fatal here," As with a lot of judge rulings, and what they're always supposed to do, they ruled on what the actual law is and not just on what sounds good. >The FTC is required to conduct a preliminary regulatory analysis wh…

What's dumb is that no one cares about the 100 million+ that customers lost in paying for extra months of subscriptions they didn't use. I feel there should be counteracting rule, like, if customers impact is X$$ than it doesn't matter what the business loss is, or maybe whichever is higher win, I don't know.

You might be misunderstanding the purpose of the hundred million dollar rule. It is an arbitrary threshold, that’s true; any threshold would be. But what it triggers is just an extra step that the FTC must go through where they receive suggestions from the public, including the industry to be regulated, for _alternatives_ to the proposed rules. They must then go through and determine for each of the alternatives whether it would be effective at achieving the goal of the new regulation, and if so whether it would be cheaper to implement than the proposed rules. If it would be both effective and cheaper to implement, then the FTC is supposed to drop their own proposed rules and adopt the alternative rules instead.

So for example if the proposed rules said that everyone selling any kind of subscription must do X, Y, and Z, and Z was pretty expensive, then you might write in and suggest doing W instead of Z. If W would be effective and cheaper to implement than Z, then the FTC is supposed to change their proposed rules to require everyone to do X, Y, and W instead.

There's just not much reason for this step to depend on how much fraud the new rules would prevent. The public comment period and the analysis steps only take a few months, and in the grand scheme of things a few months is not much time at all.

Re: US Court nullifies FTC requirement for click-to-cancel

#534

Post by Yeul »

js2 wrote: post #526
skeeter2020 wrote: post #409

Earlier quoted context omitted.

>> It’s a pro business anti consumer supreme court Maybe? But this wasn't the supreme court: "...was vacated by the US Court of Appeals for the 8th Circuit."

The 8th Circuit has an even more conservative composition than SCOTUS: https://en.wikipedia.org/wiki/United_States_Court_of_Appeals... Case was decided by Loken (GHW Bush), Erickson (Trump), and Kobes (Trump).

In my country politicians do not appoint judges. The separation of the branches of power and all that...

But I will say that having independent justices who constantly fuck up your government plans can be exhausting.

Re: US Court nullifies FTC requirement for click-to-cancel

#535

Post by db48x »

tzs wrote: post #524
pedalpete wrote: post #519

Earlier quoted context omitted.

If this $100 million in impact rule is the reason for the judgement, wouldn't that suggest that a scam that takes in more than $100 million would be protected? That's essentially what these businesses are doing. They're taking money from people who either don't want their product, or didn't realize that they'd be charged continuously. Just yesterday I cancelled a service, they made it very simple, until I read the ve…

> If this $100 million in impact rule is the reason for the judgement, wouldn't that suggest that a scam that takes in more than $100 million would be protected? No. The $100 million rule doesn't say that things with more than $100 million in impact cannot be regulated. It just says that more analysis is required when regulating such things.

Note especially that the hundred million dollar rule is about the amount of impact _of the new rules_, not the impact of the fraud that they’re trying to deter. The extra steps that they must go through are all about finding alternative rules that would be cheaper to implement, using suggestions from the public and the regulated industry.

Re: US Court nullifies FTC requirement for click-to-cancel

#536

Post by db48x »

cortesoft wrote: post #442
jakeydus wrote: post #438

Earlier quoted context omitted.

No, I think that the $100M number comes from the cost of implementing the change, not the impact to the impacted companies' bottom line.

I think the other person is right… the term is “economic impact” not “cost to implement”

No, it is only cost to implement the new rules. If this cost is estimated to be above one hundred million dollars, then extra review steps are required. These steps allow the public, and the regulated industry, to suggest alternatives. These alternatives must be evaluated to see if they would be both effective and cheaper for legitimate businesses to implement. If they are, then the FTC is supposed to drop their own proposed rules and adopt the alternative rules instead. This keeps the rules themselves from hurting legitimate businesses; the illegitimate businesses aren’t going to follow the rules anyway.

Re: US Court nullifies FTC requirement for click-to-cancel

#537

Post by mbac32768 »

John23832 wrote: post #236

What consumer does this serve at all? What citizen does this serve at all? This only serves to allow firms to erect effort barriers to keep rent seeking fro their customers. The "gotcha" that the Khan FTC didn't "follow the rules making process" is parallel construction.

If there are at least 10,000 subscription services in the US and they will spend at least $10,000 to figure out if and how to comply with a click to cancel requirement (feel free to move zeros from one number to the other), the law says they must be allowed to at least have their comments heard before it's implemented. This comment opportunity was not provided.

The regulator said it didn't reach $100 million, so there was no need. The court said bs, this would cost at least that much

Re: US Court nullifies FTC requirement for click-to-cancel

#538

Post by db48x »

blacksmith_tb wrote: post #419
Glyptodon wrote: post #413

Earlier quoted context omitted.

The main reason I think the court got it right is that with ~33 million businesses in the US you could argue that sending every business an email would cost them >$100 mil in just labor cost if they forward it a few times and several employees spend a reasonable amount of time reading it.

Luckily not all 33M of those businesses are wringing subscriptions out of their customers (yet), so it might be fairer if we could narrow it down to the subset who do? What's more interesting to me is the court is basically admitting that doing the right thing for customers will cost unscrupulous businesses more than $100M they're currently fleecing those customers for, so they won't let this go ahead.

> Luckily not all 33M of those businesses are wringing subscriptions out of their customers (yet), so it might be fairer if we could narrow it down to the subset who do?

This is quite correct. The FTC estimated that there are 106,000 businesses offering subscriptions to Americans. Those are the ones that would have to comply with the new rules.

A hundred million dollars is a lot of money, but divided by a hundred thousand businesses it suddenly is only $1000 each. Not actually that much! Since the new rules proposed by the FTC include a lot more than just a button on a website, complying with the rules would in fact require every one of these companies to do a fair amount of work. They’ll have to review all of their existing marketing material, and all of the forms that they use to sign up customers. They must ensure that all material facts are disclosed to every prospective customer, and that consent is obtained from the customer correctly.

Certainly these are good rules for businesses to follow, but the question now is the cost. Can your business review all of its marketing material for less than $1000? I doubt it. So the judge rightfully noted that the FTC’s estimate of the impact was insufficient.

And all they have to do as a result is to allow additional public comment on the proposed rules, with the specific intent to find alternatives. If these alternative rules would be just as effective but cheaper to comply with then the FTC is supposed to drop their own proposed rules and adopt the alternatives. They had already done some of this in the earlier phases of the process, and the result was that several unworkable rules were indeed dropped. They could have spent a few more months doing the final review and analysis, but they decided to rush it through instead.

> What's more interesting to me is the court is basically admitting that doing the right thing for customers will cost unscrupulous businesses more than $100M they're currently fleecing those customers for, so they won't let this go ahead.

I’ll say it again that this has nothing to do with how much the unscrupulous are getting away with, or whether it would cost the unscrupulous businesses anything at all. This is entirely about the cost to the legitimate businesses.

Re: US Court nullifies FTC requirement for click-to-cancel

#539

Post by db48x »

rtkwe wrote: post #388
vkou wrote: post #369

Earlier quoted context omitted.

Why would this have any economic impact? These dark patterns don't generate any net value, they just move money from one pocket to another. The money will be spent somewhere else, instead.

The economic impact here is only factoring in how much it would cost companies to comply with the measure which is inherently designed to give an extra hurdle by not counting the money saved by consumers not trapped by dark cancellation patterns.

Right. It doesn’t count the money consumers save by not being trapped primarily because most businesses are legitimate. This threshold is all about identifying rules that are costly for legitimate businesses to implement and allowing them time to suggest alternative rules. If the alternative rules would be just as effective while being cheaper to implement, then the FTC is supposed to drop their own proposed rules in favor of the cheaper alternatives.

Re: US Court nullifies FTC requirement for click-to-cancel

#540

Post by idiotsecant »

rfrey wrote: post #246
ordinaryradical wrote: post #192

Earlier quoted context omitted.

If it’s not America it will be China and I don’t think you want to live in that world.

It doesn't have to be China or any other country. It can be corporations who move to capture the governments in other countries the way they've done in the US.

Yes. My personal view is that the era of the nation-state is slowly ending and the era of corporate feudalism is beginning.
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