2023
Developments in Business Law
New Laws from the 2022 Legislative Cycle

Consumer Protection, Abortion Protections, and Social Media Regulations

The 2022 legislative cycle brought some additional consumer protections–car buyers are now better protected from predatory GAP waivers and substance use disorder treatment facilities now have established ethic standards they must abide by. In response to the leaked overturn of Roe v. Wade, California instituted several abortion protection laws, including a ban on insurers charging for out-of-pocket abortion costs and a ban on health care providers and service plans from releasing abortion medical data in response to subpoena based on other states’ laws banning the procedure. Social media companies were also targeted this session–social media companies’ policies on hate speech, disinformation, and extremism must be publicly posted and enforcement data must be reported; and companies that provide online services “likely to be accessed by children” are further regulated to protect the data and privacy of children.

Notice and Reporting Requirements for Social Media Companies on Hate Speech and Disinformation

AB 587 requires social media companies to publicly post their policies on hate speech, disinformation, and extremism on their platforms, and to report data on those policies’ enforcement to the state’s Attorney General. Social media companies operating in the state must publicly post their terms of service — defined in the law as a policy that specifies “the user behavior and activities that are permitted” on the company’s internet-based service and “the user behavior and activities that may subject the user or an item of content to being actioned.”

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New Online Data and Privacy Protections for Children

Under AB 2273, companies that provide online services “likely to be accessed by children” are prohibited from collecting children’s personal information, and in most cases can’t “collect, sell, or share any precise geolocation information of children by default.” The bill further prohibits those companies from “profiling” children by default, and from using “dark patterns” to encourage children to share their personal information. Companies also must not “take any action that the business knows, or has reason to know, is materially detrimental to the child’s physical health, mental health, or well-being.” AB 2273 also requires online platforms’ privacy policies, terms of service, and community standards to be easily accessible and to use “clear language suited to the age of children likely to access” the service.

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Insurers Cannot Charge for Out-of-Pocket Abortion Costs

SB 245 seeks to eliminate out-of-pocket costs for abortion services by prohibiting health plans from imposing co-pays, deductibles, or other cost-sharing requirements for those services. It also prohibits insurers from imposing utilization management practices — by which health plans evaluate the medical necessity and appropriateness of certain medical procedures — on covered abortion services.

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Ethical Standards Established for Substance Use Disorder Treatment Facilities

The California Ethical Treatment for Persons with Substance Use Disorder Act (SB 349) requires treatment providers to adopt a client bill of rights ensuring that patients are “treated for the life-threatening, chronic disease of substance use disorder with honesty, respect, and dignity, including privacy in treatment and in care of personal needs,” among other rights. The legislation also prohibits substance use treatment providers from engaging in false or misleading advertising.

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Stronger Protections for Car Buyers Against Predatory GAP Waivers

AB 2311 aims to strengthen protections for car buyers by requiring creditors to promptly refund the unearned, prepaid guaranteed asset protection (“GAP”) waiver charges if the loan or waiver agreement is terminated early. It also puts a cap on the amount that can be charged for a GAP waiver relative to the amount of the loan. The bill also blocks partial and valueless waivers from being sold as GAP waivers. The law also requires auto dealers to make certain disclosures to consumers about GAP waivers, including that the product is an optional purchase and cannot be required as part of a loan or terms of a sale.

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Health Care Providers and Service Plans Prohibited From Releasing Abortion Medical Data

AB 2091 prohibits health care providers and service plans from releasing abortion patients’ medical data in response to subpoena requests based on other states’ laws banning the procedure.

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