California has set a precedent as the first state to ban deceptive sales practices surrounding “disappearing media.” Governor Gavin Newsom signed AB 2426 into law on Tuesday, mandating that sellers of digital goods, such as books, movies, and video games, must clearly indicate when consumers are merely purchasing a license rather than owning the content outright. You can read more about the enactment of AB 2426 here.
The law, spearheaded by Democratic Assemblymember Jacqui Irwin, aims to prevent misleading terminology like “buy” or “purchase” when referring to time-limited licenses. The legislation requires that disclosures be presented separately from other terms and conditions, ensuring transparency.
This legislation was catalyzed by incidents involving Ubisoft and Sony, where consumers lost access to their purchased digital content. For instance, Ubisoft revoked licenses for its video game The Crew in April, while Sony faced backlash for threatening to remove access to Discovery TV shows, fueling the call for stronger consumer protections. You can read more about these incidents here and here.
Experts like University of Michigan law professor Aaron Perzanowski commend the new legislation, calling it a critical step toward reestablishing consumer trust and transparency in digital transactions. He emphasized the importance of clear labeling to inform consumers that their digital “purchases” might not permanently belong to them.
The law follows the recommendations outlined in a 2016 white paper by the Department of Commerce’s Internet Policy Task Force, which highlighted the need for better transparency in consumer transactions for digital goods. For more on this topic, refer to the task force’s findings here.
With digital purchases becoming increasingly common and physical media on the decline, greater accountability from sellers like Sony and Ubisoft is vital. Assemblymember Irwin hopes that AB 2426 will deter deceptive advertising and ensure that the era of “disappearing media” is a thing of the past.