Unlock the Secrets of Selling Digital Products in California with AB-2426!

If you sell digital products — like software, streaming content, or other intangible goods — to customers in California, you may have heard about a new consumer protection law: AB 2426, which came into effect on January 1, 2025.

This state law aims to ensure that when purchasing licensed digital goods, consumers understand the relevant limitations and terms beforehand, including that the goods are not being sold outright.

Here’s what you need to know:

• AB 2426 is a California law that specifically addresses the sale or advertising of licensed digital goods, where the seller can restrict or revoke usage rights.
• For applicable transactions, the law requires a clear license disclosure (and sometimes a consumer acknowledgment) regarding the nature and restrictions of the license — putting it only in your Terms and Conditions is insufficient.
• Transparency is key to building trust and future-proofing against similar regulations elsewhere.
• We suggest you consult legal counsel to confirm you’re meeting all requirements for your unique situation.

AB 2426 is a California law designed to help consumers understand their rights (and any restrictions) when obtaining licensed digital content. Generally speaking, this law requires certain disclosures when businesses offer or advertise licenses for digital goods to California-based buyers.

Why it matters

• Transparency: California wants to ensure consumers know they’re receiving a license, not ownership, of the digital product.
• Compliance: Failing to provide these disclosures on the product page itself could lead to disputes or legal ramifications.
• Best practice: Clarity around digital goods can build customer trust across all regions.

If your legal counsel advises you to include additional information or disclosures for your digital products, WooCommerce has several built-in ways to do so — no custom code needed:

• Product description or short description: Add the relevant text or disclaimers directly to the product description area so customers see it when they view the product.
• Product attributes: For concise statements, you can create custom attributes (e.g. “Usage Terms” or “Licence Information”) and display them on the product page. This approach highlights key details separately from the main description.
• Block-based checkout: If you’re using a block-based checkout (part of the newer WooCommerce experience), you can insert an additional block to display a notice or reminder during the checkout process, should your legal counsel recommend it.

These methods allow you to place any recommended disclosures exactly where customers will see them — whether that’s while browsing product information or finalizing their purchase.

Even if you’re not certain whether your product is legally “licensed,” it’s wise to:

• Check your terms and conditions: Do you reserve the right to revoke access? If so, you’re likely granting a license.
• Review existing language: Terms like “own” or “purchase outright” can be misleading if you’re actually licensing — instead of transferring ownership of — digital goods.
• Stay informed: Although AB 2426 is a California law, it could be replicated elsewhere. Taking a transparent approach now may help you avoid future compliance issues.

Because every business is different, be sure to seek advice from a qualified attorney regarding your specific products, disclosure language, and licensing structure. Regional regulations, unique product categories, and evolving ecommerce laws may all influence how you present your digital offerings.

We hope this helps you understand California’s AB 2426 and its potential implications for your WooCommerce store. By clarifying that digital products are licensed rather than sold, you can reduce confusion and protect your business. If you have further questions, consider consulting a legal professional or discussing your approach with the WooCommerce community.

Happy selling!