California has passed new legislation that will force all retailers and sellers to inform consumers that they could lose their license to digital goods such as video games, movies, music and eBooks at any time. 

The law will go into effect in January and only applies within California’s borders. It prohibits retailers/sellers from using the terms “buy” and “purchase” during transactions without providing a clear and concise warning to shoppers that they’re only getting a license to the product, and that it can be revoked if the seller no longer holds the rights. 

This law will extend to all storefronts operating in the state, including video game publishers Sony and Ubisoft, which inspired it. Last year, Ubisoft delisted its racing game The Crew from all online stores when it shuttered servers and faced licensing challenges regarding music featured in the title. That same year, Sony also attempted to remove all Discovery TV shows from its PlayStation platform before signing a new license agreement with Warner Bros. Discovery. 

Assembly member Jacqui Irwin introduced the bill (AB 2426) in February, saying there’s a new need for consumer protections when it comes to digital media as retailers continue to pivot away from selling physical copies. Sellers who break the law could face fines of US$2,500 for each violated sale and non-compliant listing.