Disney+ Fights To Keep It Harder To Cancel Your Subscription

A group backed by Disney+ and other streaming giants is fighting against the click-to-cancel rule, which would force subscription services to make canceling as easy as signing up.

The click-to-cancel rule is a newly established regulation by the Federal Trade Commission (FTC) to simplify the cancellation process for consumers across various subscription services. This regulation mandates that canceling subscription services must be as straightforward as the sign-up process.

Essentially, consumers should not encounter any additional hurdles or obstacles when attempting to cancel a service.

Key provisions of the click-to-cancel rule affecting subscription services include clear and conspicuous disclosures before a consumer provides billing information and charges are made.

Moreover, any negative option features—where a customer’s silence is construed as acceptance—must have an explicit consent requirement before billing. The FTC’s initiative to modernize its rules, initially established in 1973, reflects the evolving landscape of digital commerce.

Compliance with these new regulations will begin 180 days after the rule is published in the Federal Register. This is intended to give companies time to adjust their operational practices and ensure they meet the newly established requirements.

Impact on Subscription Services

The click-to-cancel rule has substantial implications for streaming services, particularly Disney+. As consumer protection measures tighten, Disney+ and other platforms are expected to face substantial changes in how customers cancel their subscriptions.

Previous practices, which often involved complex and time-consuming procedures, must now be simplified to comply with the new regulation.

These new requirements mean that customers should experience a more user-friendly cancellation process, which may increase user satisfaction. However, the transition presents challenges for companies as they may need to reconfigure their customer service platforms and processes to ensure compliance.

The expectation now is that the industry will pivot from retention strategies that rely on inertia—where customers fail to cancel due to the difficulty involved—to a more transparent and accessible customer experience.

Legal Response from Disney+ and Other Industry Players

In light of the new regulations, the NCTA (The Internet & Television Association) and other trade groups have filed a lawsuit against the FTC. The Walt Disney Company (owners of Disney+, Hulu, and ESPN+), Comcast/NBCUniversal, Paramount Global, Sony Pictures Entertainment, and Warner Bros. Discovery are all members of the NCTA.

This legal challenge seeks to block the implementation of the click-to-cancel rule, arguing that the agency’s actions are arbitrary and beyond its statutory authority. The complaint highlights concerns that the rule may be implemented without sufficient justification, thereby categorizing the FTC’s decision as overreach.

“Petitioners respectfully request that this Court hold unlawful, vacate, enjoin, and set aside the Final Rule and provide such additional relief as may be appropriate,” the suit reads.

The arguments presented by the cable industry trade groups focus on the assertion that the new obligations would impose substantial regulatory burdens on subscription services. They contend that compliance with the rule could increase operational costs and complexities, ultimately disrupting consumer service delivery.

The outcome of this legal challenge could have lasting repercussions for the subscription services landscape if the courts decide in favor of the complaint, potentially allowing services to maintain previously established cancellation processes.

Do Disney+, Hulu, Netflix, Peacock, and other streaming services make canceling too complicated? Share your experience with Disney Fanatic in the comments.