By Jody Godoy
(Reuters) - Chegg Inc. has agreed to pay $7.5 million to settle U.S. Federal Trade Commission claims that the educational technology company made it difficult to cancel subscriptions, according to court papers filed in San Jose, California, on Monday.
Chegg buried cancellation options behind multiple menus on its website, according to the FTC complaint, which joins a number of recent FTC actions against companies over onerous cancellation methods.
Chegg knew the process was difficult and
confusing, the FTC said, citing internal emails including a 2021 email from Nathan Schultz, who is now Chegg's chief executive, saying there "should be some pain involved" in cancellation.
A Chegg spokesperson said the company disagrees with the FTC's claims but settled to avoid prolonged litigation.
A court this year blocked a Biden-era FTC rule that would require companies to make it as easy to cancel services as it is to sign up. The Trump FTC has used existing authority to sue individual companies it says use overly burdensome cancellation methods.
The FTC sued Uber Technologiesin April alleging it deceptively marketed its Uber One subscription, and sued the operators of gym chain LA Fitness in August for burdensome membership cancellation requirements. The agency is also gearing up for trial next week in a case accusing Amazon.com of enrolling users in Prime without their knowledge and making it difficult to cancel the service. The companies are contesting the allegations.
(Reporting by Jody Godoy in New York; Editing by Chizu Nomiyama and Mark Porter)
