If you sell digital products to customers in California (such as software, streaming content, or other intangible products), you may have heard of the new consumer protection laws: AB 2426effective on January 1, 2025.
The state law is intended to ensure that when purchasing licensed digital goods, consumers are aware of the relevant restrictions and terms in advance, including the absence of direct selling of goods.
Here’s what you need to know:
- AB 2426 is a California law that specifically targets the sale or advertising of licensed digital goods that sellers may restrict or revoke their right to use.
- For applicable transactions, this law requires the nature and limitations of the license, requiring clear licence disclosure (sometimes a consumer confirmation) – only under your terms and conditions.
- Transparency is key to building trust and preventing the future against similar regulations elsewhere.
- We recommend that you consult a legal counsel to confirm that you meet all your requirements for your unique situation.
Does AB 2426 work for me?
If your business sells or advertises a license to California digital goods and uses terms like “buy” or “buy” to describe these transactions, the law may apply. We recommend talking to a qualified attorney for personalized assessment.
Even if the law does not currently apply to every jurisdiction, it is worth learning about best practices regarding transparent communication for digital products. Below, we outline the features provided by WooCommerce to help you meet your compliance obligations.
Please note: The information in this article is for general guidance only and is not legal advice. Always consult with a qualified attorney for advice about your business.
AB 2426 is a California law designed to help consumers understand their rights (and any restrictions) when they obtain licensed digital content. Generally speaking, when a business provides a digital merchandise license to a California-based buyer, certain disclosures are required.
Why it matters
- transparency: California wants to make sure consumers know they are licensed for digital products, not ownership.
- obey: Failure to provide these disclosures on the product page itself may result in controversial or legal consequences.
- Best Practices:Clarity around digital goods can build customer trust in all regions.
If your legal counsel recommends that you include additional information or disclosures in your digital product, WooCommerce has several built-in ways to do this – no custom code is required:
- Product description or short description: Add the relevant text or disclaimer directly to the product description area so that customers can see it when viewing the product.
- Product Attributes: For concise statements, you can create custom properties (such as “Terms of Use” or “License Information”) and display them on the product page. This approach and the main description highlight key details respectively.
- Block-based checkout: If you use block-based checkout (part of the newer WooCommerce experience), you can insert an extra block during the checkout process to show notifications or reminders if your legal counsel advises you.
These methods allow you to place any recommended disclosure exactly where the customer sees it – whether it is browsing product information or finalizing their purchase.
Even if you are not sure if your product is legally “licensed”.
- Check your terms and conditions:Do you reserve the right to revoke access? If so, you may grant a license.
- View existing languages: Terms such as “self” or “buy thoroughly” may mislead you to actually license (rather than transferring ownership of digital goods).
- Stay informed: Although AB 2426 is California law, it can be copied elsewhere. A transparent approach now can help you avoid future compliance issues.
Because each business is different, make sure to seek advice from a qualified attorney about your specific product, disclosure language and licensing structure. Regional regulations, unique product categories and evolving e-commerce laws may affect the way you present your digital products.
We hope this helps you understand AB 2426 in California and its potential impact on WooCommerce stores. By clarifying that digital products are licensed rather than sold, you can reduce confusion and protect your business. If you have other questions, consider consulting a legal professional or discussing your approach with the WooCommerce community.
Happy selling!
James is the core product manager at WooCommerce. He has been working with WordPress since 2009 and has released many free and high-quality WooCommerce plugins before joining the WOO team in 2023.
