The FTC’s ‘Click to Cancel’ rule is stirring up the ad tech industry. Here’s why publishers and advertisers are pushing back.
In an unsurprising move, the IAB and friends are taking up the welcome mat from under the FTC’s Click to Cancel rule.
The Interactive Advertising Bureau (IAB), along with the NCTA (Internet & Television Association) and the Electronic Security Association (ESA), have filed a lawsuit against the Federal Trade Commission (FTC) to block its new Click to Cancel rule.
The regulation aims to make it easier for consumers to cancel subscriptions—making it as easy to cancel as subscribe. Naturally, groups representing telecoms, home security companies, and advertisers—whose revenues benefit from acquiring and maintaining subscribers—are not pleased.
So why are these industry players, including the IAB, so worked up about this rule?
In their own words, it’s because the FTC is “overstepping its authority” by imposing what they call “arbitrary and capricious” regulations. The argument here isn’t new. The IAB claims that the FTC is overstepping its authority by imposing sweeping regulations across multiple industries.
The IAB and its allies argue that the FTC’s rule could have unintended consequences. They say easier cancellations might lead to higher customer churn rates, potentially forcing companies to raise prices or reduce service quality.
They also see an opportunity given recent Supreme Court decisions, such as the Chevron deference ruling, which limits regulatory power and gives industries more leverage to push back.
Regulatory Power Play: Who Calls the Shots?
The Click to Cancel rule is more than just a fight over the mechanics of subscription services—it’s a litmus test for how much power the FTC has over an increasingly unruly digital landscape.
In the digital media and advertising industry, friction-heavy experiences are often the norm. The FTC’s click-to-cancel rule aims to crack down on some of the consumer frustration with canceling subscriptions and auto-renewals.
With rising subscription fatigue and the prevalence of dark patterns, consumers increasingly demand transparency and ease in canceling services, making the FTC’s Click to Cancel rule more relevant than ever.
By mandating that businesses make the cancellation process just as easy as signing up. With the ‘Click to Cancel’ rule, the FTC is targeting one of the core friction points of the ‘negative option’ model, including any subscription where silence or inaction implies acceptance. This model covers over 1 billion U.S. subscriptions, underscoring the rule’s sweeping impact.
But it’s precisely this friction—this hassle—that companies profit from.
Every extra step required to cancel a subscription is by design—an approach meant to leverage user inertia, which conveniently keeps the cash flowing for companies relying on recurring revenue.
While the FTC aims to protect consumers, the industry argues that this rule could stifle innovation in subscription models, which have been a key driver of growth in the digital economy.
The IAB represents a broad swath of digital advertisers—Meta, Google, Amazon, Netflix—you name it. Their business thrives on these recurring revenues. They’re concerned that easier cancellations could impact their bottom lines, and they’re fighting tooth and nail to keep the status quo.
The Ripple Effect on Ad Tech and Publisher Strategies
With Click to Cancel, publishers and the ad tech ecosystem have much at stake. For years, we’ve been advocating for publishers to create more transparent value exchanges—to demonstrate why a user should consent to data collection, especially as third-party cookies disappear. In this new era, consent is the new currency.
In this context, the Click to Cancel rule tests whether companies really care about empowering consumers or just want to milk them for all they’re worth. If users are forced to stay subscribed because canceling feels like trying to find Waldo on a crowded page, how can we expect them to trust publishers with their data?
And in the age of first-party data, trust and value are everything. Dotdash Meredith, for instance, has embraced this reality with D/Cipher, an innovative intent-based targeting tool that doesn’t rely on cookies or individual user profiles. The tool leverages aggregated and anonymized data to provide value to both users and advertisers. Users get more relevant content and ads, and advertisers get access to consumers who intend to purchase. The results speak for themselves.
Similarly, The New York Times has successfully implemented a first-party data strategy through its digital subscription model, which generated over $1 billion in revenue in 2023. The media company’s tiered subscription model has allowed it to gather valuable user data while providing personalized content experiences.
Still, publishers also face legitimate concerns about how easier cancellations might impact their business models and ability to invest in quality content and services.
Does Click to Cancel Get in the Way of First-Party Data Strategies?
Here’s where things get especially interesting for publishers. The IAB argues that making cancellations easier could deter people from subscribing, ultimately reducing opportunities for first-party data collection.
But let’s be real—do publishers want subscribers sticking around only because they can’t easily cancel? Or do they want genuinely engaged users who see true value in the content and services offered?
Dotdash Meredith and The New York Times’ success proves that consent-first strategies can work and even boost performance. They know that entrapped users aren’t exactly the holy grail of high-quality data—genuine buy-in is what publishers need, and not reluctant retention. In a cookieless future, that kind of trust-driven relationship is gold.
Transparency is crucial, but the industry argues that there’s a delicate balance between user-friendly practices and maintaining sustainable business models that allow for continued investment in services and content.
The Industry’s Existential Moment
Is ad tech going to evolve to genuinely serve users, or will it cling to dark patterns and loopholes to stay afloat?
The Click to Cancel rule could be an inflection point, showing whether the future of digital advertising will prioritize user empowerment or continue exploiting friction to retain revenues.
Ultimately, the takeaway for publishers is clear—stick to what’s been working: first-party data, transparent value exchanges, and genuine commitment to user consent. Trust isn’t just a buzzword—it’s the key separating inners from those left scrambling in an increasingly privacy-conscious ecosystem.
Consumer trust is paramount, and the industry needs to balance these concerns with sustainable business practices. The challenge lies in finding a middle ground that respects their rights without undermining the economic foundations of digital media and advertising.