Digital Ownership In California: AB 2426 Explained

Think you’ve built a permanent digital library of movies, games, and books? Think again. When you hit “buy” on platforms like Amazon, Steam, or iTunes, you’re often securing a revocable license, not true ownership. This shift from physical to digital media has blurred the lines, leaving consumers vulnerable to content removal, platform changes, and lost access — all while companies profit endlessly.

California’s new AB 2426 law mandates clear disclosures, highlighting the growing consumer backlash. As digital spending surges — with U.S. consumers projected to spend over $100 billion on digital goods in 2025 — understanding this distinction is crucial for protecting your investments.

The Myth of Digital Ownership

Physical media like DVDs or CDs come with clear ownership rights under the first sale doctrine (Section 109 of U.S. copyright law), allowing resale, lending, or destruction without permission. Digital files? Not so much. Courts have ruled that “purchases” grant licenses, not ownership, as seen in Vernor v. Autodesk, where restrictive terms in software licenses were upheld.

This means no resale (blocked by Capitol Records v. ReDigi, which deemed file transfers infringing copies), no lending outside platforms, and no guaranteed permanence. Platforms like Amazon Prime Video explicitly state you receive a “non-exclusive, non-transferable, non-sublicensable, limited license”. Your access hinges on their servers, terms, and whims.

• No resale rights: Unlike a used DVD, digital movies can’t be sold on eBay.
• Revocable access: Companies can delete content if licensing expires or you violate terms.
• Interoperability issues: Locked to ecosystems like Kindle or Steam, preventing transfers.

Real-World Examples of Digital Loss

History is littered with cases where paid content vanished. In 2014, Ubisoft delisted Assassin’s Creed Liberation HD from Steam, blocking access for buyers. Microsoft shut down e-book lending in 2019, erasing users’ libraries despite DRM-locked files.

PlayStation’s recent content purges removed games entirely from digital libraries. Nintendo’s Switch 2 update sparked outrage by allowing remote bricking of consoles for TOS violations, undermining even physical ownership. These aren’t anomalies — they’re the norm in a licensing model where sellers retain control.

These events underscore a core issue: Digital goods lack the ‘bundle of rights’ — use, exclude, transfer, enjoy — inherent to physical property.

California’s AB 2426: A Push for Transparency

Enacted in 2024, California’s AB 2426 targets this opacity, requiring platforms selling ‘digital goods’ — including audiovisual works, audio, books, apps, games, and codes — to disclose that buyers receive a license, not ownership.

Key mandates:

• Clear and conspicuous notices: Must stand out via size, color, or font before checkout.
• Broad scope: Applies to any electronic delivery or access.
• Penalties: Violations invite fines and lawsuits, pushing compliance from Steam, Apple, and others.

This law doesn’t grant ownership but empowers informed choices. As one analysis notes, it addresses how fine-print TOS often escape notice, especially with rising game prices.

The Legal Landscape: Licenses Trump Ownership

U.S. copyright law’s first sale doctrine doesn’t apply cleanly to digital works due to reproduction in transfers. The PTO’s 2016 White Paper rejected digital first sale changes, citing services like cloud libraries as sufficient. Proposals for ‘fair use’-style digital resale face hurdles: enforcement needs DRM, which courts deem circumventable.

Internationally, the EU’s GDPR and CCPA bolster data rights (knowledge, consent, access, deletion) but falter on media ownership. For consumers, true ownership demands ongoing access, portability, and resale — rights routinely absent.

Ownership rights include knowledge, consent, access, limitation of use, destructibility, and sellability for data; consumers seek similar for media.

Risks Beyond Revocation

Even without shutdowns, risks abound:

• Platform bankruptcy: Libraries could evaporate if servers go dark.
• TOS changes: Unilateral updates can add restrictions.
• Geoblocking: Moves abroad? Access denied.
• Family sharing limits: No true lending to heirs.

For creators, digital shifts enable licensing control but erode consumer sovereignty.

How to Protect Your Digital Library

While full ownership eludes us, mitigate risks:

1. Read TOS: Scrutinize before buying.
2. Opt for physical: DVDs retain resale rights.
4. Subscriptions over ownership: Netflix avoids sunk costs in revocable buys.
5. Multi-platform backups: Buy across ecosystems.
6. Advocate: Support laws like AB 2426 expansions.
7. Rip legally (where possible): Some regions allow personal backups.

Services like ReDigi tried resale but failed legally; future tech may prevail.

Frequently Asked Questions (FAQs)

What does ‘buying’ digital media really mean?

It means acquiring a license to access, not own, the content — revocable by the seller.

Can I resell my digital games or movies?

No, platforms prohibit it, and courts uphold this via anti-copying rules.

Does AB 2426 give me ownership?

No, it requires disclosure that you’re licensing, aiding informed decisions.

What if a platform shuts down?

Your access ends; no legal recourse for ownership claims.

Are there exceptions for physical-digital hybrids?

Even owned consoles can be remotely disabled.

The Future of Digital Rights

As streaming dominates, expect more laws like AB 2426. Blockchain/NFTs promise provable ownership, but scalability lags. Until then, treat digital buys as rentals — convenient, but fleeting. By staying vigilant, you can save money and headaches in this license-driven world.

This article is general information, not personal financial advice. Consider your own situation, or speak with a licensed adviser, before acting on it.