New California law requires digital storefronts to disclose licensing terms to customers
A recently enacted California law, AB 2426, will compel digital storefronts to inform customers that they are licensing, not purchasing, digital goods. This legislation could impact digital video game platforms such as the PlayStation Store, forcing them to disclose that players are essentially licensing games that may be revoked if the seller loses the rights to the product.
Starting next year, digital sellers will not be allowed to use terms like “buy” or “purchase” unless they explicitly state that the consumer is acquiring a license for the digital product. Failure to comply with this requirement may result in penalties for false advertising. Sellers will need to obtain acknowledgment from customers that they are purchasing a license or provide a disclaimer before each transaction clarifying that the digital good is licensed and outlining the terms and conditions.
In essence, digital storefronts operating in California will now have to acknowledge to customers that they are obtaining a license for the product, rather than assuming unrestricted ownership. This change could potentially affect Sony’s PlayStation Store, impacting all PlayStation users who buy digital content through the platform.
According to Assemblymember Irwin, who sponsored the bill, “As retailers shift away from physical media sales, it is crucial to ensure consumer protections for digital media purchases. AB 2426 aims to eliminate deceptive practices by sellers who mislead consumers into believing they own their digital purchases.”
The objective of the new law is to raise consumer awareness about the nature of their digital purchases, highlighting that many transactions involve licensing rather than outright ownership. An example of this scenario occurred when Sony announced the removal of Discovery TV shows from PlayStation platforms due to licensing issues, which was later resolved through an agreement between Sony and Warner Bros.
(Source: Digital Democracy)