Various streaming services and businesses are legally fighting against a recent rule designed to simplify the cancellation process for subscriptions and memberships.

The NCTA – The Internet & Television Association, which represents leading cable and internet companies like Charter Communications and Comcast, along with media giants such as Disney, claims that the Federal Trade Commission (FTC) has overreached its power with the new “click to cancel” regulation.

A lawsuit lodged in the 5th U.S. Circuit Court of Appeals argues that this rule could impact up to 1 billion paid subscriptions across the U.S. and describes it as “arbitrary, capricious, and an abuse of discretion.”

The Interactive Advertising Bureau, representing the online advertising sector, and the Electronic Security Association, advocating for the home security industry, support this legal action.

The FTC has not provided any comments regarding the situation.

The recently enacted rule, effective from October 16, requires businesses to obtain consent for subscriptions, auto-renewals, and free trials that convert into paid memberships. According to the FTC, the cancellation process must be “at least as easy” as the enrollment process.

This regulation is part of President Joe Biden’s initiative to tackle “junk fees.” Vice President Kamala Harris promoted the proposed “click to cancel” measure in September.

The FTC’s decision was passed by a vote of 3-2, with the two Republican commissioners opposing it.

While some services allow cancellations through just a few clicks or a simple phone call, others create complex processes that leave customers with unwanted recurring charges long after they no longer wish to use a service.

The number of complaints about challenging cancellation experiences has surged in recent years, with the FTC reporting an average of nearly 70 complaints daily.

Trade groups representing various industries, including advertising, news media, and retail, assert that a complex cancellation process is necessary to protect consumers and enables them to secure better deals. They believe the new FTC rule imposes excessive demands on businesses and is unnecessary.

“It’s puzzling why companies would view transparency regarding prices and terms as a burden or why they wouldn’t comply with cancellation requests from customers who no longer wish to engage with them,” said Teresa Murray, director of consumer advocacy at Public Interest Research Group, to YSL News. “Clearly, many businesses have employed misleading tactics to attract and retain customers.”

Murray highlighted that some companies have preemptively aligned with the new FTC regulations by ensuring clear pricing and simplifying their cancellation processes.

“Many companies support these new regulations because they create fairness for those competing against others that may not reveal price hikes and similar terms,” she added.

On Wednesday, consumer advocates accused the industry groups of “venue shopping” by filing the lawsuit in a federal appeals court that leans conservative.

Twelve of the judges currently serving were appointed by presidents from the Republican party, including six by former President Donald Trump.

“Major corporations that utilize misleading subscription strategies to ensnare customers are attempting to evade this regulation that would reduce expenses for millions of consumers,” remarked Liz Zelnick, director for the economic security and corporate power program at watchdog group Accountable.US. “We’ve seen this tactic before, with large industry players preferring to litigate in jurisdictions that favor corporations, regardless of its effects on the American populace.”

There was no immediate response from the trade groups involved in the lawsuit.