Another Biden-Era Rule Overturned: SBE Council Applauds Court Ruling Overturning FTC’s “Click to Cancel” Rule

By SBE Council at 9 July, 2025, 7:41 pm

NEWS

For Immediate Release

Washington, D.C. - The Small Business & Entrepreneurship Council (SBE Council) commended an Eighth Circuit Court of Appeals ruling on July 8, that overturned the Federal Trade Commission's (FTC's) "Click to Cancel" (Negative Options) rule. SBE Council has been active in pointing out the harms of the rule on small businesses that offer monthly recurring subscriptions. The group has urged the new FTC leadership to pull the overly burdensome and complex rule, and on May 20, also filed a recommendation with the Department of Government Efficiency (DOGE) to rescind the rule. As noted by SBE Council President & CEO Karen Kerrigan, the rule threatens the competitive viability of many small businesses by making it more costly and difficult for them to use a convenient purchasing model for consumers. If fully implemented, the rule would have forced many small businesses to expend significant time and resources on new technology solutions, staff training, and other costs to ensure compliance with the overly broad and complex rule.

"The court ruling is an important victory for small businesses. Beyond the relief and certainty it provides small businesses, the message from the court is an important one for federal regulators: They must follow the rules when promulgating new rules. Regulators cannot manipulate the rulemaking process to advance their own political or personal agendas," said Kerrigan.

In its advocacy work, SBE Council emphasized:

● That the rule imposes harm on small businesses and consumers, by forcing small businesses to expend significant time and resources on tools and training to ensure compliance with the overly broad and complex rule. Small business owners expressed concerns about these high costs, legal risks, and the ambiguity of the rule.

● The FTC exceeded its authority under Section 18 of the FTC Act and the rule conflicts with other federal statutes that already regulate recurring subscriptions.

● The rule is a one-size-fits-all approach that is inappropriate given the highly diverse industries it affects and will impose disproportionate and unjustifiable costs on small businesses and their customers.

● The rule does not comply with regulatory procedures or the FTC's statute in a number of ways.

● The rule regulates 1 billion subscriptions with one-size-fits-all mandates that are not appropriate for the diverse industries it covers.

Kerrigan added:

"This is not the first time the FTC has been called out on rulemakings that exceed their statutory authority or on problematic legal moves against U.S. businesses. Numerous courts continue to clean up the regulatory mess and uncertainty created by Former Chair Lina Khan, and we continue to urge the new FTC to accelerate the unwinding of Biden-era rules and actions that are undermining the economic resurgence that President Trump is aiming to achieve."

Related Content:

Cleaning Up Khan's Mess: A New Day for Startups and Small Businesses at the FTC , Small Business Insider blog post (February 2025)

CONTACT:

KAREN KERRIGAN: kkerrigan@sbecouncil.org

SBE Council is a nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For more than 30 years, SBE Council has advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth.

Visit www.sbecouncil.org for additional information. X: @SBECouncil

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