Selling digital products in California? Read about AB-2426

When you promote digital merchandise — like software program, streaming content material, or different intangible items — to clients in California, you’ll have heard a few new client safety regulation: AB 2426, which got here into impact on January 1, 2025. 

This state regulation goals to make sure that when buying licensed digital items, customers perceive the related limitations and phrases beforehand, together with that the products aren’t being bought outright.

 Right here’s what it’s worthwhile to know:

• AB 2426 is a California regulation which particularly addresses the sale or promoting of licensed digital items, the place the vendor can limit or revoke utilization rights.
• For relevant transactions, the regulation requires a transparent licence disclosure (and generally a client acknowledgment) relating to the character and restrictions of the license — placing it solely in your Phrases and Circumstances is inadequate.
• Transparency is vital to constructing belief and future-proofing in opposition to related rules elsewhere.
• We propose you seek the advice of authorized counsel to substantiate you’re assembly all necessities in your distinctive state of affairs.

AB 2426 is a California regulation designed to assist customers perceive their rights (and any restrictions) when acquiring licensed digital content material. Typically talking, this regulation requires sure disclosures when companies provide or promote licenses for digital items to California-based consumers. 

Why it issues

• Transparency: California needs to make sure customers know they’re receiving a license, not possession, of the digital product.
• Compliance: Failing to offer these disclosures on the product web page itself might result in disputes or authorized ramifications.
• Finest observe: Readability round digital items can construct buyer belief throughout all areas.

In case your authorized counsel advises you to incorporate further info or disclosures in your digital merchandise, WooCommerce has a number of built-in methods to take action — no customized code wanted:

• Product description or brief description: Add the related textual content or disclaimers on to the product description space so clients see it once they view the product.
• Product attributes: For concise statements, you’ll be able to create customized attributes (e.g. “Utilization Phrases” or “Licence Info”) and show them on the product web page. This strategy highlights key particulars individually from the primary description.
• Block-based checkout: When you’re utilizing a block-based checkout (a part of the newer WooCommerce expertise), you’ll be able to insert a further block to show a discover or reminder through the checkout course of, ought to your authorized counsel advocate it.

These strategies assist you to place any advisable disclosures precisely the place clients will see them — whether or not that’s whereas shopping product info or finalizing their buy.

Even in the event you’re not sure whether or not your product is legally “licensed,” it’s clever to:

• Test your phrases and situations: Do you reserve the best to revoke entry? If that’s the case, you’re probably granting a license.
• Overview present language: Phrases like “personal” or “buy outright” will be deceptive in the event you’re truly licensing — as an alternative of transferring possession of — digital items.
• Keep knowledgeable: Though AB 2426 is a California regulation, it may very well be replicated elsewhere. Taking a clear strategy now could allow you to keep away from future compliance points.

As a result of each enterprise is totally different, make sure to search recommendation from a professional lawyer relating to your particular merchandise, disclosure language, and licensing construction. Regional rules, distinctive product classes, and evolving ecommerce legal guidelines could all affect the way you current your digital choices.

We hope this helps you perceive California’s AB 2426 and its potential implications in your WooCommerce retailer. By clarifying that digital merchandise are licensed somewhat than bought, you’ll be able to cut back confusion and shield what you are promoting. You probably have additional questions, contemplate consulting a authorized skilled or discussing your strategy with the WooCommerce neighborhood.

Pleased promoting!

James serves because the Core Product Supervisor for WooCommerce. He has labored with WordPress since 2009, and launched quite a few free and premium WooCommerce plugins earlier than becoming a member of the Woo crew in 2023.