WASHINGTON, D.C. (Nov. 6, 2024) – NFIB filed a legal challenge against a recent rule from the Federal Trade Commission (FTC), which targets businesses that engage in automatic renewals of subscriptions or memberships. NFIB filed a petition for review of the FTC’s rule in the United States Court of Appeals for the Sixth Circuit arguing that the Court should strike down the rule. NFIB filed the challenge with the Michigan Press Association.
“At a time when small businesses are struggling from record overregulation, this rule exacerbates those challenges by imposing more regulatory costs and paperwork burdens,” said Beth Milito, Executive Director of NFIB’s Small Business Legal Center. “Unlike large companies that have teams of lawyers and compliance consultants, most small businesses handle their recordkeeping on their own. This rule will require more time and resources most small businesses can’t afford. It is a clear example of administrative overreach.”
In the challenge, NFIB maintains that the FTC’s final rule is an attempt to regulate consumer contracts for companies in all industries and across all sectors of the economy. The rule imposes new onerous regulatory obligations regarding disclosures, how those disclosures must be communicated, what company representatives can say to consumers, and more. Lastly, NFIB’s petition argues that the FTC’s final rule violates the Administrative Procedure Act, is unsupported by substantial evidence, and exceeds the agency’s authority. We urge the Court to find the rule unlawful and vacate it.
The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.
