Advertising Law Blog

Last month, New York passed its 2025-2026 omnibus budget bill. Contained within the Transportation, Economic Development and Environmental Conservation bill are unique consumer protection provisions, including those related to automatic renewals, online return policies, and algorithmic pricing disclosures, as well as AI companions. Given the method in which they were enacted, many of these provisions threaten to take online marketers by surprise.

Summaries of these measures and the applicable effective dates are detailed below.

1. Refund Policies

New York has broadened its requirements regarding posting of refund policies to online retailers. Pursuant to the new requirements, online retailers must conspicuously post the applicable refund policy by a notice displayed or accessible by a hyperlink near the item itself or prior to the request for consumer billing information. Failure to do so will result in an automatic 30-day refund policy being applied.

This provision goes into effect on August 7, 2025.

2. Automatic Renewals

New York has updated its automatic renewal law. Key requirements of the updated law are outlined below.

• Businesses must clearly and conspicuously disclose the material terms of an automatic renewal offer, including the description of the product or service, the amount that will be charged, the frequency of charges, the deadline by which the consumer must act to prevent charges, and the methods of cancellation, before consent to the offer or billing information has been requested. These terms must be displayed in close visual or temporal (as applicable) proximity to the request for consent.
• If the offer contains a free gift or trial, or the price is temporary, the offer must also include a clear and conspicuous explanation of how and when the price will change, and what those subsequent prices will be.
• In the event a business wishes to increase the price, the business must either obtain the consumer’s affirmative consent to such increased price or allow the consumer to cancel the automatic renewal anytime within the 14-day period that follows the charge of the increased amount. If the consumer cancels within that 14-day period, the business must refund the consumer in the amount equivalent to the price of the remaining term of the service at the time of cancellation on a pro-rata basis.
• Promptly following affirmative consent, the business must provide the consumer with a notice including the terms of the automatic renewal arrangement, the amount that will be charged, the deadline by which the consumer must act to prevent charges, and the methods of cancellation.
• Businesses must provide consumers with the option to cancel at any time using a simple cancellation mechanism that is at least as easy to use as the mechanism used to provide consent to the automatic renewal. Businesses must provide cancellation through all mediums by which the business allows a consumer to provide affirmative consent to an automatic renewal or price increase.
• Businesses must not impose unreasonable or unlawful conditions, refuse to acknowledge, or obstruct or unreasonably delay cancellation requests. If a consumer conveys a request to cancel, the business may present the consumer with a discounted offer, retention benefit, or information regarding the effect of cancellation, but may not impose unreasonable or unlawful conditions upon the consumer’s ability to cancel, refuse to acknowledge, or obstruct or unreasonably delay requested cancellation.
• Where the initial paid term is one year or longer and it is renewing for a paid term of six months or longer, the business must notify the consumer of an automatic renewal charge 15 to 45 days before the cancellation deadline. Such notice must include instructions on how to cancel.
• Businesses must provide clear and conspicuous notice of any material change in the automatic renewal terms, including any price increases, 5 to 30 days before the date of the change.
• If the automatic renewal includes a free gift or trial for a period of more than a month, the business must issue a notice 3 to 21 days before the cancellation deadline for the first chargeable period.

These provisions go into effect November 5, 2025.

3. Algorithmic Pricing

New York General Business Law has been amended to require any entity that sets the price of a specific good or service using personalized algorithmic pricing – that is, dynamic pricing set by an algorithm using the consumer’s personal data specific to the particular individual – to include the following clear and conspicuous statement at or near the stated price – “THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA.” There are several exceptions to this provision, including when the price that is offered to a consumer who has an existing subscription-based contract with an entity is less than the price for the same goods or service than set forth in the subscription-based contract. However, the requirement to include this unique disclosure will have wide-ranging implications.

This provision goes into effect on July 8, 2025.

4. Artificial Intelligence Companion Models

New York General Business Law has been amended to add a new provision related to artificial intelligence companion models. Under the new provision, operators of AI companions will be required to take reasonable steps to detect and address suicidal ideations or expressions of self harm expressed by the user to the AI companion.

Further, AI companion operators will be required to provide clear and conspicuous notification to users at the beginning of any AI companion interaction that the user is not communicating with a human. For continuing AI companion interactions, this notification must be made at least once every three hours.

This provision goes into effect on November 5, 2025.

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These amendments to the New York consumer protection law, many of them novel, will likely have a significant national impact given the borderless nature of ecommerce. Businesses should carefully review their practices to ensure compliance. We are available to discuss their application to your marketing activities.

Please feel free to contact either of the attorneys listed at left if you would like to discuss this matter.

This publication is issued by Olshan Frome Wolosky LLP for informational purposes only and does not constitute legal advice or establish an attorney-client relationship. In some jurisdictions, this publication may be considered attorney advertising.
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