On September 24, 2024, California enacted Assembly Bill 2863 (the “Bill”) to take effect on July 1, 2025.[1] The Bill updates California’s regulations governing automatic renewals and continuous services. An automatic renewal or continuous service (“auto renewal contract”) is defined as a contract that renews automatically at the end of a definite term or becomes a payable contract after a free trial period.[2] The Bill continues the state trend of expanding regulations to protect California consumers when enrolling in subscriptions.[3]

The most significant change under the Bill is the new requirement that businesses must allow consumers to cancel the subscription using the same medium the consumer used to enroll in the auto renewal contract. Notably, if a business allows a consumer to accept such an offer online, it must allow the consumer to also terminate the auto renewal exclusively online with no extra steps.

Another meaningful change requires businesses to obtain consumers’ express affirmative consent to the terms of an auto renewal contract offer. Businesses are prohibited from undermining consumers’ ability to provide affirmative consent through “dark patterns.”[4] Businesses must also keep a three-year record of the consumer’s affirmative consent, or a one-year record after the end of the contract, whichever is longer.

The Bill also adds several notice requirements. Businesses must send consumers an annual notice that includes the product or service provided by the auto renewal contract, the frequency of billing and associated costs, and the means to cancel the product or service. Businesses must also provide notice to the consumer stating the frequency of billing and the costs that will accrue once a trial or promotional period is over. In the event of a fee change to the product or service, businesses must provide clear and conspicuous notice of the fee change and how to cancel between seven and thirty days before the fee change takes effect.

The trend of increased notice requirements extends beyond California.[5] California’s new affirmative consent mandate emulates New York’s law distinguishing automatic renewal provisions from the rest of a subscription contract.[6] Businesses providing auto renewal contracts will need to carefully examine their subscription contract terms to ensure that they follow the express affirmative consent requirement. With the states and federal regulators continuing their efforts to tighten controls over auto renewal contracts, businesses should remain attentive to ensure compliance with all the relevant rules. The regulatory compliance team at McGuireWoods is available as a resource to help clients navigate the changing landscape.


[1] Governor Gavin Newsom, Governor Newsom signs consumer protection bills targeting medical debt, overdraft fees, and unfair subscription practices (Sep 24, 2024).

[2] California Legislative Information, AB-2863 Automatic Renewal and Continuous Service Offers (Sep 25, 2024) (definition updated in Cal. Bus. & Prof. Code § 17601(a)(1) (2025) under the Bill).

[3] California Legislative Information, AB-390 Advertising: Automatic Renewals and Continuous Service Offers: Notice and Online Termination (Oct 04, 2021)

[4] CFPB, CFPB Issues Guidance to Root Out Tactics Which Charge People Fees for Subscriptions They Don’t Want (Jan 19, 2023) (“Digital dark patterns are design features used to deceive, steer, or manipulate users into behavior that is profitable for a company, but often harmful to users or contrary to their intent.”).

[5] Utah State Legislature, H.B. 174 Automatic Renewal Contract Requirements (Mar 13, 2024); Minnesota State Legislation, SF 4097 – 3rd Engrossment (Sep 09, 2024); Connecticut State Legislation, Substitute House Bill No. 5314 – Public Act No. 23-191 (Jun 28, 2023).

[6] New York State Legislation, Legislation – Section 527-A (Dec 15, 2023).