BILL NUMBER: S8952
SPONSOR: FAHY
 
TITLE OF BILL:
An act to amend the general business law, in relation to disclosures by
sellers of digital goods
 
PURPOSE:
To ensure that consumers are clearly informed when they are purchasing a
license to access digital goods rather than acquiring full ownership, by
mandating specific disclosures in advertisements and sales of such
goods.
 
SUMMARY OF PROVISIONS:
Section 1 adds a new section 350-b-2 to the general business law to
require that sellers of digital goods clearly and conspicuously disclose
to consumers that a transaction marketed as a "purchase" or "buy" is, in
fact, a license agreement unless specific conditions are met.
Section 2 establishes that the act will take effect 90 days after becom-
ing law.
 
JUSTIFICATION:
This bill ensures that New York consumers are clearly informed when
purchasing digital goods-such as ebooks, music, or video games-that they
are receiving a limited license, not full ownership. Currently, sellers
can use terms like "buy" or "purchase" even when they retain the right
to revoke access. This common but misleading practice leaves consumers
confused and vulnerable when digital products they believed they owned
are suddenly removed or restricted.
The bill requires sellers who use ownership language to either obtain
clear acknowledgment from the buyer that the transaction is a license,
or provide a conspicuous notice before purchase explaining that access
is limited and subject to terms. Disclosures must be plainly stated and
separate from general terms and conditions. The bill exempts
subscriptions, free digital goods, and permanently downloadable content.
A similar law was recently adopted in California, setting a national
precedent for transparency in digital transactions. New York should
follow suit to protect its residents from deceptive advertising prac-
tices and ensure fair treatment in the digital marketplace.
 
LEGISLATIVE HISTORY:
New bill
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become law.