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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
digital goods; seller's requirements; enforcement
Purpose
Outlines unlawful advertising practices for digital goods. Provides for enforcement of the digital goods advertising requirements in accordance with the Arizona Consumer Fraud Act.
Background
Statute outlines trade and commerce practices and restrictions in general and for particular industries or transactions, including certain advertising acts deemed fraudulent and requirements for digital advertising directed toward children (A.R.S. §§ 44-1481 and 44-1483).
The Arizona Consumer Fraud Act protects consumers from unlawful practices in merchant-consumer transactions and is enforced by the Attorney General (AG) and by county attorneys with enforcement authority granted by the AG. The act, use or employment by any person of any deception, deceptive or unfair act or practice, fraud, false pretense, false promise, misrepresentation, concealment, suppression or omission of any material fact with intent that others rely on such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise whether or not any person has in fact been misled, deceived or damaged is declared to be an unlawful practice under the Arizona Consumer Fraud Act. Enforcement of the Arizona Consumer Fraud Act is accomplished through the investigation of complaints filed by consumers, enforcement actions against persons who have violated the Arizona Consumer Fraud Act and public education. If a court finds that a person has willfully violated consumer protection laws, the AG, upon petition to the court, may recover up to $10,000 in civil penalties for each violation (A.R.S. Title 44, Chapter 10, Article 7).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Deems it unlawful for a seller of a digital good to offer for sale or advertise a digital good to a purchaser using the terms buy or purchase or any other term that a reasonable person would understand to confer an unrestricted ownership interest in that digital good, or alongside an option for a time limited rental, unless the following occur:
a) at the time of each transaction, the seller makes available to the purchaser:
i. a complete list of restrictions and conditions for the license, including any circumstances under which access may be revoked; and
ii. notice that the license may be for a product that was altered from the product's original version;
b) at the time of each transaction, the seller receives an affirmative acknowledgement from the purchaser that the purchaser received:
i. a license to access the digital good;
ii. a notice that the seller may revoke access to the license if the purchaser violates any of the license restrictions or conditions; and
iii. a notice that the seller may unilaterally revoke access to the digital good if the seller no longer holds the right to provide access to the digital good, the service is shut down or discontinued or on the occurrence of any of the circumstances that were specified by the seller; and
c) before executing each transaction, the seller provides to the purchaser a clear and conspicuous statement that:
i. states in plain language that buying or purchasing a digital good is a license; and
ii. includes a hyperlink, QR code or other similar method to access a description of the terms and conditions of the license.
2. Requires any affirmative acknowledgment from the purchaser or clear and conspicuous statement to be distinct and separate from any other terms and conditions of the transaction to which the purchaser acknowledges or agrees.
3. Requires the seller, after the transaction is completed, to provide notice to the purchaser and offer a prorated refund or alternative access option if the terms of the license change in a way that materially affects the purchaser's access.
4. Requires the prorated refund to be calculated on a straight-line declining basis at a rate of 10 percent of the original purchase price per year from the date of purchase, with no refund available after the expiration of 10 years from the date of purchase.
5. States that the digital goods advertising requirements do not:
a) require a person to download a digital good;
b) prohibit a person from storing a digital good on a server for access through the internet;
c) prohibit a seller from implementing digital rights management technology to a digital good that is advertised or offered to a person in accordance with the digital goods advertising requirements; or
d) prescribe the technical specifications or formats under which a seller must make a digital good available for download.
6. States that the digital goods advertising requirements do not apply to any of the following:
a) a subscription-based service that advertises or offers for sale access to any digital good solely for the duration of the subscription;
b) a digital good that is advertised or offered to a person without monetary consideration;
c) a digital good that is advertised or offered to a person and that the seller cannot revoke access to after the transaction, including by making a version of the digital good available at the time of purchase for permanent offline download to an external storage source or device to be used without a connection to the internet;
d) a blockchain-based asset, including a non-fungible token, where ownership is decentralized and not subject to unilateral revocation by the seller; or
e) an educational or noncommercial digital good that is provided by a public library, educational institution or open-source platform.
7. Deems a violation of the digital goods advertising requirements an unlawful practice under the Arizona Consumer Fraud Act.
8. Allows the AG to investigate and take appropriate actions as provided by the Arizona Consumer Fraud Act.
9. Defines blockchain-based asset as a digital good whose ownership and access are verified through a decentralized ledger technology, including blockchain technology, and that cannot be unilaterally revoked or altered by the seller after the transaction.
10. Defines clear and conspicuous as a manner that clearly calls attention to the language including:
a) using larger type than the surrounding text;
b) using contrasting type, font or color to the surrounding text of the same size; and
c) setting off the surrounding text by using symbols or other marks.
11. Defines a digital application or game as an application or game that a person accesses and manipulates using a specialized electronic gaming device, computer, mobile device, tablet or other device with a display screen, including any add-ons or additional content for that application or game.
12. Defines digital audiovisual work as a series of related images and accompanying sounds that when shown in succession impart an impression of motion including:
a) motion pictures;
b) musicals;
c) videos;
d) news and entertainment programs; and
e) live events.
13. Defines digital audio work as a work that results from the fixation of a series of musical, spoken or other sounds that are transferred electronically, including any of the following:
a) prerecorded or live songs;
b) music;
c) oral readings of books or other written materials;
d) speeches; and
e) ringtones or other sound recordings.
14. Defines digital book as a work that is generally recognized in the ordinary and usual sense as a book of fiction or nonfiction and that is transferred electronically.
15. Defines digital code as code that provides the person who holds the code a right to obtain an additional digital good or a digital audiovisual work, digital audio work or digital book that may be obtained by any means, including tangible forms and electronic mail, regardless of whether the code is designated as song code, video code or book code.
16. Includes in the definition of digital code:
a) codes that are used to access or obtain any specified digital goods or any additional digital goods that have been previously purchased; and
b) promotion cards or codes that are purchased by a retailer or other business entity for use by the retailer's or entity's customers.
17. Defines digital good as including any of the following, whether electronically or digitally delivered or accessed:
a) a digital audiovisual work;
b) a digital audio work;
c) a digital book;
d) a digital code; and
e) a digital application or game.
18. Excludes from the definition of digital good:
a) a cable television service;
b) a satellite relay television service; or
c) any other distribution of television, video or radio service.
19. Designates this legislation as the Making Internet Non-Ownership Understandable for Streaming Act or the MINUS ACT.
20. Becomes effective on the general effective date.
House Action
COM 1/27/26 DPA 11-0-0-0
3rd Read 2/09/26 59-0-1
Prepared by Senate Research
March 2, 2026
JT/NRG/ci