California Click to Repeal Subscription Law AB-2863

Assembly Bill 2863 was signed into law this week by California Gov. Gavin Newsom, requiring companies to comply with regulations that make it much simpler to opt out of digital subscriptions, among other protections for customers.

The bill was described by CA Assembly Member Pilar Schiavoa as “a model for the nation in protecting consumers from unnecessary fees – giving them more control over their finances and helping to ensuring fair business practices, providing a win for consumers and small businesses.”

In particular, the bill means that companies that offer automatic renewal of subscriptions must offer cancellation through the same means that customers use to sign up. For example, if one subscribes to an online service, a simple click to cancel should be made easily available on the same site.

As subscription-based services have become a ubiquitous reality, ethical questions have been raised regarding confusing cancellation processes and unfair fees. Earlier this year, California-based software company Adobe was at the center of a Federal Trade Commission lawsuit over hidden fees and confusing cancellation processes. In addition to addressing such concerns, the new bill also aims to protect people from other unfair business practices such as bank overdraft fees and undisclosed hospitality fees.

Although national legislation has not yet been passed, the California decision sets a precedent that will likely have greater influence across the country. The bill’s requirements are expected to take effect in California by mid-2025.