California Introduces New Law Requiring Digital Stores to Clarify Ownership Rights

A recently enacted California law mandates that digital storefronts inform customers that they do not retain ownership of their digital purchases. Enacted on September 24, this legislation applies to all digital storefronts, including those offering video games. It prohibits the use of terms like "buy" and "purchase" when selling digital goods, unless it is explicitly stated that customers are licensing the product rather than owning it. To comply with this law, digital storefronts must provide a clear statement in plain language before each transaction, including a link to the license terms and conditions. Additionally, they must notify customers that their access to a digital game may be revoked if the seller loses the rights to the product. According to the California Public Interest Research Group, recent acquisitions, mergers, and contract expirations in the media industry have put consumers' digital media at risk, despite their initial belief that they owned the content. The group noted: "In some instances, last-minute agreements have allowed consumers to continue accessing their purchased content until the next merger puts it at risk again. In other cases, consumers have lost access to digital content they had purchased entirely." The group emphasized that as retailers shift away from physical media sales, the need for stronger consumer protections when buying digital goods becomes increasingly important. Last December, Ubisoft removed The Crew from online stores due to server infrastructure and licensing constraints. Around the same time, Sony announced the removal of Discovery TV shows from the PlayStation store, citing "licensing arrangements," which meant users could no longer access the shows they had purchased. However, this decision was later reversed after Sony and Warner Bros reached an updated licensing agreement.