Acting in advance of a California law that goes into effect on January 1, cloud gaming platform Steam has begun posting a notice that its customers are purchasing a license, not a product. The language that appears in the Steam shopping cart now includes the advisory that “purchase of a digital product grants a license for the product on Steam.” Signed into law last month, California’s AB 2426 is categorized a consumer protection law against false advertising for digital goods. Specifically, it requires online sellers provide a “conspicuous” advisory that licenses are limited in duration and can be revoked.

“A seller of a ‘digital good’ cannot advertise or offer it for sale with the terms ‘buy’ or ‘purchase,’ or any other term that a reasonable person would understand to confer an unrestricted ownership interest, or alongside an option for a time-limited rental,” according to a news alert by law firm Cooley LLP.

Violations are misdemeanors that could trigger civil penalties, Cooley explains, advising that “before this date, covered companies may need to update their licenses, as well as the purchase flow for digital content, to provide the requisite notice and obtain customer acknowledgements at the point of sale.”

AB 2426 combats customer complaints of “disappearing” digital goods, including games, movies, apps and e-books. Some feel a subsection on “digital code” could be held to include NFTs, though the law doesn’t make specific reference to blockchain items.

The California law was passed following “situations like Ubisoft deleting ‘The Crew’ from player’s libraries after the game’s servers shuttered,” reports Engadget.

As a result, “even those who paid full price for the open-world racer could no longer play it,” IGN writes of the Ubisoft game. The company “eventually added offline modes to both ‘The Crew 2’ and ‘The Crew Motorfest,’ but said it wouldn’t bring back the original following its shutdown in March.”

The California legislation is prompting many companies to revisit their overall approach to digital storefronts. Steam has gone so far as to add its Steam store warnings “in various regions across the world, including the UK,” according to IGN.

The law does not apply to content that can be permanently downloaded, or “any subscription-based service that advertises or offers for sale access to any digital good solely for the duration of the subscription,” Cooley writes.

Related:
California Enacts Laws for Sub Canceling, Digital Downloads, ETCentric, 9/27/24