California Tightens Online Auto Renewals Law

SACRAMENTO, Calif.—On September 24, California Gov. Gavin Newsom signed Assembly Bill (AB) 2863 into law, clamping down on auto-renewing subscription services. The new law requires companies offering automatic renewals and continuous services to provide customers with an easier way to cancel subscriptions in the same way. According to Newsom's office, this ensures that customers can easily exit services without being trapped in a confusing process to cancel or face hidden fees. "At a time when too many in our community are struggling, unwanted subscription renewals can really add up," said Asm. Pilar Schiavo, the Democratic lawmaker who initially introduced AB 2863. She added, "AB 2863 is the most comprehensive ‘Click to Cancel’ legislation in the nation, ensuring Californians can cancel unwanted automatic subscription renewals just as easily as they signed up—with just a click or two." “Nobody wants to get ripped off, whether it’s a small subscription fee that’s seemingly impossible to cancel or massive medical debts which force families into financial ruin," said Gov. Newsom in the same press statement. "We’re strengthening protections for Californians across the board and helping save consumers money." The law requires companies to acquire an "express affirmative consent" to automatic renewal terms, which requires a higher degree of consent to user agreements. It also requires companies to prevent user agreements and contracts featuring information that undermines a consumer's ability to affirmatively consent to auto-renewals. This measure directly impacts adult websites with recurring subscription models. Corey Silverstein, an adult industry attorney, warned that compliance is necessary. He said that "this law will significantly impact operations" for adult platforms. Compliance strategies would require adult websites to adopt transparent billing and subscription procedures ensuring users are fully informed to grant expressed consent. This new legally required degree of transparency will additionally be promoted through annual activity reports sent to users featuring an explanation of charges and services. Users must also be notified of fee changes and other changes to the user agreement or any other applicable conditions of the subscription. Also, user experiences for renewals and cancellations need to be simplified and intuitive. This means that canceling subscriptions must be simple and effective.  Organizations that opposed AB 2863 include digital news media properties and advertisers, including Conde Nast and the parent company of the Dallas Morning News. The California Chamber of Commerce also opposed the bill, along with retailers and the Motion Picture Association, which represents mainstream film studios. Consumer protection advocates predominately voiced support for the bill, like the Consumer Federation of California and the California Low-Income Consumer Coalition. AB 2863 enters force on July 1, 2025, giving adult companies based in California or with a large user base in that digital space about nine months to comply.