A Republican proposal to change Arizona law would require companies that sell digital downloads or streaming of movies and games to disclose to customers if they’re only purchasing temporary licenses and not permanent copies of that media. (Photo by Getty Images)
A bill that would have made companies that sell digital downloads or streams of movies and video games disclose to customers that they’re not purchasing permanent copies of that media was among the dozens of measures vetoed last week by Gov. Katie Hobbs.
The bill by Rep. Nick Kupper, R-Surprise, would have seen Arizona follow California and mandate that companies disclose when consumers are obtaining a revocable license on digital goods as opposed to full ownership.
Kupper’s House Bill 2010 would have made it illegal for a seller of a digital good to advertise that good using the terms “buy” or “purchase” if they do not inform consumers of restrictions on that purchase. Those restrictions include the possibility that the product could be altered or access to it could be revoked in the future.
Large companies like Amazon and Sony have come under fire in recent years after consumers found that TV shows, movies and video games they purchased were removed from their digital libraries. Many consumers are unaware that when they “buy” a digital movie or TV show they are really only purchasing a license agreement, which can later be revoked. That means consumers don’t really own much of the content they purchase.
Last year, California passed a similar law.
Hobbs, in her veto letter, said that the bill was not clear enough.
“The refund provisions of this legislation are ambiguous and inconsistent with other states,” Hobbs said. “I welcome legislation that provides notification standards and refund provisions that are implementable and clear.”
Kupper said the veto caught him off guard, as the bill had near unanimous support throughout its legislative journey.
“That one surprised me. I’m not going to lie,” Kupper said of the’ veto, noting that the Governor’s Office had never indicated it had problems with the legislation ahead of the veto.
The bill had unanimous support up until its final days of the legislative session when Democratic members in the House and Senate voted against it after a return to the Capitol after a long recess. Kupper cited comments he made online about Rep. Anna Abeytia, D-Phoenix, mentioning her previous abortion while commenting on a photo of the Democrat and her newborn baby, as the reason why Democrats switched positions on the bill.
“The reason I believe, and I don’t know this to be a fact on why the Democrats fell off at the end, was because of my comments on Anaya Abeytia,” Kupper said, adding that he still votes in favor of bills he finds good policy, regardless of “whose name is on a bill.”
As for Hobbs’ veto, Kupper said he doesn’t entirely understand the governor’s resistance, as he had worked with tech stakeholders like Apple to amend the bill in ways that made them more comfortable with the legislation.
“It was almost exactly the law that California passed, and it was brought to me by a Libertarian,” Kupper said.
The measure also included a provision that says a seller must notify a consumer that the seller could modify the content, something that comes from Kupper’s own experience when a digital good he purchased was altered after he paid for it.
In 2020, the creator of the TV comedy series “The Office” deleted a scene that included a character who wore blackface. Kupper said he noticed when rewatching the episode that the scene was gone.
The bill would have required that a seller of digital goods provide a consumer with a list of the restrictions and conditions they are agreeing to under the license, a notice that the license may be altered from its original version and a notice that the license may be revoked. And it would have required that the statements must be clear and conspicuous.
Consumers would be asked to acknowledge that they understand these terms and conditions, which would be distinct from other terms and conditions that consumers are used to agreeing to online if the bill had been signed into law.
Any company that violated the disclosure could be investigated for violating the state’s consumer fraud act. Additionally, any consumer who is “aggrieved by a violation” could bring a civil action to “recover actual damages, reasonable attorney fees and court costs,” and if the “violation is wilful or knowing,” the court may award additional damages.
The bill did not apply to subscription-based streaming services, free services or educational goods provided by libraries or public institutions.
When asked if he intends to bring the legislation back next session, Kupper was quick to respond.
“Oh, 100% yeah,” he said.
