Changes To California's Automatic Renewal Law May Require Updates For Subscription Service Providers

Subscription services face increased scrutiny from regulators, lawmakers and the plaintiffs' bar. As we highlighted in a recent client alert, the FTC warned companies against using "dark patterns" in connection with paid subscriptions. In 2022, California's Automatic Renewal Law (ARL)-one of the most robust statutes of its kind-will place even stricter requirements on enrollment in (and cancellation from) paid subscription services. Businesses with subscribers in California should be aware of this update and the new obligations it imposes.

California's ARL

The express purpose of the ARL is "to end the practice of ongoing charging of consumer credit or debit cards or third-party payment accounts without the consumers' explicit consent for ongoing shipments of a product or ongoing deliveries of service." The law applies broadly to any business that makes an "automatic renewal offer or continuous service offer" to a consumer in California, with exemptions for