By Jody Godoy
(Reuters) - An industry group representing cable and internet providers sued along with two others on Wednesday to block a U.S. Federal Trade Commission rule that requires companies to offer simple cancellation mechanisms for subscriptions.
NCTA - The Internet & Television Association and groups representing the home security and online advertising industries said in papers filed with the 5th U.S. Circuit Court of Appeals in New Orleans that the rule known as "click to cancel" oversteps the FTC's authority and was not supported by evidence.
A spokesperson for the FTC declined to comment.
The FTC finalized the rule on Oct. 16 after considering thousands of comments from individuals, industry groups and consumer advocates.
The Electronic Security Association, Interactive Advertising Bureau, and NCTA had filed comments criticizing the rule as overly broad.
NCTA represents major cable and internet providers including Charter Communications (NASDAQ:CHTR), Comcast Corp (NASDAQ:CMCSA), and Cox Communications, as well as media companies such as Disney Entertainment and Warner Bros. Discovery (NASDAQ:WBD).
The rule requires businesses to get consumers' consent for subscriptions, auto-renewals and free trials that convert to paid memberships. The cancellation method must be "at least as easy to use" as the sign up process.
It also prohibits requiring consumers who signed up through an app or a website to go through a chatbot or agent to cancel. For in-person signups, companies must provide means to cancel by phone or online.
The 5th Circuit is a popular venue for business groups to challenge agency actions. Twelve of the 5th Circuit's 17 active judges were appointed by a Republican president, including six by former President Donald Trump.