NYC Adopts Click to Cancel Rules as Federal Consumer Protection Collapses

New York City Mayor Zohran Mamdani announced Executive Orders 9 and 10 last week, implementing a “click to cancel” rule that requires companies to allow consumers to cancel subscriptions as easily as they signed up for them. The orders also ban hidden junk fees, shifting consumer protection enforcement to the municipal level after federal efforts to regulate subscription cancellations were blocked by the courts.

The NYC mandate follows guidance from Lina Khan, who previously led the Federal Trade Commission (FTC). Under Khan, the Biden-era FTC passed federal “click to cancel” rules in late 2024 designed to punish companies that use complex processes to prevent users from ending services. According to Techdirt, these federal rules were intended to address decades of difficulty consumers faced when attempting to cancel services from entities such as AOL and the Wall Street Journal.

The federal initiative failed to take effect after the 8th Circuit Court of Appeals struck down the rules. The court, consisting of Trump appointees, sided with insurance companies, marketing firms, and gym operators who sued to stop the FTC’s regulation. This judicial intervention effectively neutralized the federal government’s ability to enforce a uniform national standard for subscription cancellations.

Mayor Mamdani’s Executive Orders on Junk Fees and Subscriptions

Mayor Mamdani’s new executive orders target the “business model” of companies that make it difficult for users to retain their money. The city’s policy specifically targets the discrepancy between one-click sign-ups and the multi-step processes often required for cancellation.

For years, companies have built their business model around making it harder for working people to hold onto their money. Whether it’s hidden fees that suddenly appear at checkout or subscriptions that take one click to sign up for and a dozen steps to cancel, the result is the same: working people pay more while corporations profit. That ends now. If you can sign up with one click, you can cancel with one click.

Mayor Zohran Mamdani

By banning hidden junk fees and mandating a simplified cancellation process, New York City is attempting to create a local regulatory environment that mirrors the goals of the defunct FTC rule. This move reflects a broader trend where municipalities are assuming the role of consumer protector as federal agencies face increased judicial setbacks.

The Shift Toward Localized Consumer Protection

The failure of the FTC’s “click to cancel” rule is part of a wider pattern of dismantled federal consumer protections. Techdirt notes that the FCC’s attempted “nutrition label” for broadband services, which aimed to provide transparent pricing and prevent hidden fees, was also demolished by the Trump administration.

This regulatory vacuum has forced a reliance on a patchwork of state and municipal laws. While these local efforts provide a mechanism for protection, they often face significant hurdles in execution. Techdirt cites the “right to repair” movement as a precedent, where states pass bold legislation to stop corporate monopolies on repairs, but often fail to engage in the rigorous enforcement necessary to make the laws effective.

Other states have similarly struggled with junk fee bans. In Illinois, for example, the state announced efforts to ban such fees but exempted several of the most problematic industries from the rules, limiting the actual impact on consumers.

Corporate Impact and Regulatory Fragmentation

The transition from federal to municipal oversight creates a fragmented regulatory landscape. Companies operating across multiple jurisdictions must now navigate different sets of rules regarding how they bill customers and handle cancellations. This inconsistency is often criticized by “free market” entrepreneurs and corporations who argue that a patchwork of laws is inefficient for business operations.

However, this fragmentation is the direct result of the successful legal challenges brought by corporate interests against federal regulators like Lina Khan. By blocking antitrust reforms, bans on noncompete agreements, and the “click to cancel” rule at the national level, these entities have effectively pushed the battleground for consumer rights into city halls and state capitals.

The effectiveness of Mayor Mamdani’s orders will depend on the city’s willingness to invest the time and financial resources required to sue deep-pocketed corporations that refuse to comply with the one-click cancellation mandate.