"Click-to-Cancel" Comments during Federal Trade Commission Hearing

The following are transcribed remarks delivered to the FTC during its Open Commission Meeting on January 18th, 2024, briefly outlining the business case that a proposed “Negative Option Rule” - a.k.a. Click-to-Cancel - is overly broad and harmful:

“Good morning and thank you Chair Kahn, Mr. Farrar, and the full Federal Trade Commission for the opportunity to share a brief statement regarding the Negative Option Rule, also known as “Click-to-Cancel.”  My name is Dr. Justin Velez-Hagan, an economist and business owner by trade, but I am submitting this comment on behalf of the constituents of the National Puerto Rican Chamber of Commerce.  As the founder and current member of the board of our organization, I can attest that we have seen first-hand how the proliferation of online services has allowed for the effective growth and scaling of our businesses.

As the FTC explores the click-to-cancel issue further, it is critically important to be mindful that unwarranted regulation on any company can result in greater harm to customers and create uncertainty in the marketplace.  There are stark differences in how companies operate based on the services rendered.  For example, phone and internet service providers ensure customers have multiple access points into the company that allow customers to effectively modify, customize, or cancel service, allowing an opportunity for business consumers to understand low-cost alternatives and special programs to retain valuable services.  Music streaming services, on the other hand, tend to offer fewer such customer service options. The impact of canceling a phone or broadband service, a subscription to a medical service provider, or numerous other examples, differs significantly from canceling a music streaming service. Requirements for canceling service should not be reduced to a one size fits all approach that could be burdensome and costly for small and large businesses alike.

Regulations that are too broad can have devastating effects on healthy industries with no record of unfair or deceptive business practices. This would be an unfortunate and significant misstep if pursued by the FTC and will result in business uncertainty that will have economic reverberations nationwide for businesses and consumers alike. With that said, I encourage the FTC to continue to build the public record on this issue and aim to create a strong and diverse public record before pursuing amendments to the existing rule.

Thank you for your time and attention.”