The Cancellation Rule That Survived and the One That Didn't

Two governments spent the past several years chasing the same idea: a company that lets customers sign up for a subscription online has to let them cancel it just as easily. One version of that idea is legally dead in the United States. The other has been fully enforceable across the European Union since June 19, 2026, and nobody has managed to knock it out yet.

DontSnooze runs on the same recurring-billing model this entire fight is about, so it has an actual stake in which of these two approaches ends up defining the norm, which is as good a reason as any to look closely at why one rule folded and the other is still standing.

Same idea, two different instruments

In the US, the Federal Trade Commission spent years amending its Negative Option Rule to require that ending a subscription take no more effort than starting one. It was set to take effect July 14, 2025.

The EU took a different route to the same destination. Directive (EU) 2023/2673 amends the existing Consumer Rights Directive (2011/83/EU) by adding Article 11a, which obligates any trader selling to EU consumers online to provide a withdrawal button that makes ending a contract at least as easy as entering into it. Member states had until December 19, 2025 to write that requirement into their own national statutes, and the directive itself became generally applicable across the bloc on June 19, 2026.

Germany didn’t wait for Brussels. Its Gesetz für faire Verbraucherverträge (Fair Consumer Contracts Act) added Section 312k to the German Civil Code back in 2022, requiring a permanently visible cancellation button, labeled unambiguously, that leads straight to a confirmation form. That domestic law has been tested in German courts for four years already, well before the EU-wide version existed.

What actually killed the American version

On July 8, 2025, six days before the rule’s compliance deadline, the Eighth Circuit vacated it entirely in Custom Communications Inc. v. FTC (No. 24-3137). The panel didn’t rule on whether mandatory easy cancellation is good policy. It ruled on paperwork: once an administrative law judge determined the rule’s compliance cost would exceed $100 million a year, the FTC Act required the agency to publish a preliminary regulatory analysis of alternatives before finalizing anything. The FTC skipped that step, so the entire amendment came down, with no partial version, no fallback covering just annual subscriptions or just online signups.

A site breakdown of exactly what that ruling changed and didn’t change is worth reading in full if you want the six specific consequences spelled out. The short version relevant here: a single independent agency wrote one rule through its own internal rulemaking docket, and one appellate panel finding one procedural defect in that single instrument was enough to erase it nationwide, instantly. The agency’s separate authority to pursue unfair or deceptive practices under Section 5 wasn’t touched, but that’s a narrower, case-by-case tool that has to be litigated claim by claim, not a standing requirement every company has to build toward before the fact.

Why the European version wasn’t exposed the same way

A directive doesn’t fail the way an agency rule does, because it isn’t one legal document sitting in one court’s jurisdiction. Each of the EU’s member states has to pass its own statute transposing Article 11a by the deadline, which means the actual binding requirement lives in at least 27 separate national laws rather than a single federal regulation. Knocking out the EU-wide requirement in one stroke would mean successfully challenging that many national statutes at once, in that many national court systems, each running on its own procedural rules.

There’s also no equivalent target for the specific objection that worked against the FTC. Directive (EU) 2023/2673 passed through the EU’s ordinary legislative procedure: the elected European Parliament and the Council of national governments voted it into law, rather than a specialized regulator acting alone on its own rulemaking docket. Ordinary legislation doesn’t carry the FTC Act’s particular tripwire (a mandatory cost-benefit study once compliance costs cross a dollar threshold), so there was no comparable procedural shortcut available for opponents to challenge in the first place.

Germany’s head start mattered too. By the time the EU-wide requirement became binding, one member state had already spent four years working out the edge cases in its own courts, including carve-outs for financial services and contracts requiring a qualified electronic signature. The FTC’s version never got that runway; it was vacated before its first compliance deadline arrived.

What this means beyond the headline

“The federal rule is gone” and “the underlying legal exposure is gone” aren’t the same fact, and the gap between them is where a subscription business’s actual risk sits. State-level auto-renewal laws in the US are untouched by the Eighth Circuit’s ruling. The FTC’s general Section 5 authority is intact. And a company operating in the EU is now bound by a live, national-law-backed requirement that a US-based competitor selling only domestically simply doesn’t face.

The more durable lesson is about process, not popularity. Nothing in the Custom Communications opinion suggests judges found the underlying consumer-protection idea objectionable; the rule died on a technicality about which paperwork an agency has to file, in what order, before a rule becomes final. A requirement passed as ordinary legislation and pushed out through dozens of national statutes doesn’t have that single point of failure. For any business selling recurring subscriptions across both markets, which government wrote a given requirement, and through which process, is turning out to matter as much as how popular the requirement itself is. A different consumer-app legal question runs into the same US-versus-EU split: a feature that clears a federal standard cleanly can still face a stricter one from a single state or a different regulatory tradition entirely.

A narrower, related question, whether a customer can dispute an already-processed charge rather than prevent the next one, runs on a completely different legal track in the US: a Fair Credit Billing Act dispute has its own, much tighter set of conditions, unrelated to whatever happens next with the click-to-cancel rule. Whether that same subscription is even worth deducting on a freelancer’s taxes is a smaller, calmer version of the same “which rule actually governs this dollar” question.