California Governor Gavin Newsom recently signed into law SB 478, a bill that broadens the California’s consumer protection laws to combat a variety of fees and charges often dubbed as “junk fees”. The legislation, which goes into effect on July 1, 2024, targets companies operating within the state of California.
As per the new law, businesses are prohibited from advertising, displaying, or offering “a price for a good or service that does not include all mandatory fees or other charges”, barring taxes and shipping fees. This move indicates a proactive approach towards increasing transparency in pricing for consumers. The bill has been brought forth evidently to aid consumers in making informed decisions regarding purchases they make, which are often affected by hidden additional costs posted outside of the apparent prices.
This isn’t the only recent push towards protecting consumer interests in the state. California’s already robust consumer protection laws have been continuously expanded and updated to reflect the evolving business landscape. For instance, SB 378, another law aimed at improving pricing transparency, was signed in late 2020.
While these legal changes promise to elevate the transparency and fairness of business transactions within the state, they could have significant implications on the business models of several companies. Law firms and corporations operating or based in California may need to reassess their existing pricing strategies and methods to ensure compliance.
Actual implementation of the new law and how successful it will be in eliminating “junk fees” still remains to be seen. A clear understanding of how these consumer protection bills may impact the corporate world may take time to fully unravel.
Read more on California’s fight against “junk fees” here, prepared by Morgan Lewis law firm.