Recent Revisions to California Law Substantially Increase Responsibilities and Risks for Trial and Subscription Offers

Extract of article recently published on Clickbooth site written by Ginny Sanderson, Partner

The state of California recently passed amendments to the California Automatic Renewal Law that increase responsibilities and risks for trial and subscription offer promotion. Given the nature of the requirements, and in the best interests of all partners, Clickbooth will suspend trial nutraceutical marketing in the state of California.

On July 1, 2018, amendments to California’s Automatic Renewal Law (ARL), dramatically increased the compliance requirements for trial and subscription offers made to California consumers. Prior to these changes, the standards generally applied to subscription offers came from The Restore Online Shoppers Confidence Act (“ROSCA”). The California ARL, as revised, is stricter than ROSCA in the following ways:

1. The California ARL has a wider range of enforcement than ROSCA.
The FTC is charged with enforcing ROSCA. 15 U.S.C. § 8404 and private consumers are unable to sue directly under ROSCA. By contrast, “all available civil remedies” are applicable to a violation of the ARL. This means that the Attorney General of California and county district attorneys can prosecute violations of the ARL. It also leaves the door open for individual consumers to sue, including through class action litigation.

2. The California ARL requires subscription billing terms to be made in visual proximity to the “Order” button.
The ARL requires that the subscription billing terms be: (a) provided to the consumer BEFORE the order is completed, and (b) located in visual proximity to the request for consent to the offer (i.e., the “Submit Order” or similar button). Thus, under the ARL, subscription terms conveyed on a separate page, by hyperlink, by pop-up, solely by inclusion in the website’s terms of service, or so low on the checkout page that the consumer must scroll to see them are not compliant.

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This entry was posted on Thursday, November 15, 2018 and is filed under Press & Published Articles, Internet Law News.