FTC Sues Uber Over Deceptive Practices In Its Subscription Program

Benesch reports that the Federal Trade Commission (FTC) has filed a lawsuit against Uber in the Northern District of California, alleging that the company violated the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA) by employing deceptive practices in its Uber One subscription service (Federal Trade Commission v. Uber Technologies, Inc).

This lawsuit marks a continued FTC focus on consumer protection, particularly in the context of subscription services. It came just weeks before the “Click-to-Cancel” rule, designed to streamline subscription cancellation, took effect.

The case was filed amid leadership shifts within the FTC, including the appointment of Commissioner Mark Meador and the removal of two commissioners.

Despite these changes, the FTC appears committed to curbing deceptive subscription practices.

The FTC claims Uber failed to meet ROSCA requirements: clear disclosure of material terms, obtaining express informed consent, and offering simple cancellation mechanisms.

The complaint alleges that Uber misled consumers by enrolling them without their consent, obscuring key subscription details, and making cancellation excessively difficult.

Uber allegedly charged users without adequate disclosure, and often before the agreed billing date.

The complaint highlights how Uber’s sign-up process concealed costs and how its cancellation pathway required numerous steps and customer service interactions, contrary to its claims of easy cancellation.

Although the Click-to-Cancel rule is not part of this case, it underscores the tightening regulatory environment. Attorneys should advise clients to audit their subscription programs to ensure compliance with ROSCA and Click-to-Cancel.

Companies must transparently disclose terms, obtain informed consent, and implement user-friendly cancellation processes. Failure to comply invites significant legal and financial risks. Lawyers should help their clients adapt to evolving FTC expectations around consumer and ROSCA requirements.