Potential Liabilities Faced by MMOG Developers

Terra Nova just posted an article about a recent change in Second Life that has effectively devalued the property of many SL denizens. The article quotes a lawyer who cites established legal precedent to explain why Linden Lab (developer of SL) may be at legal risk in this (and related) matters. The basic argument: LL gave users good reason to think that some virtual land plots are worth more than others, so LL can be held liable for actions that devalue the land, no matter how many waivers users agree to when playing SL.

This is just one of the many unresolved legal issues popping up for MMOGs, and especially MMORPGs. I couldn’t find a good, succinct list online, so I’ve compiled one:

  1. What happens when one player steals another player’s property?
  2. What happens when players generate content that infringes upon the copyrights or trademarks of real-world companies? (Here’s an example other than City of Heroes). For that matter, what happens when one player copies another player’s work? Can they sue each other, and/or the developer?
  3. What happens when players (especially underage players) engage in “legally indecent” acts? Can EA (developer of Sims Online) be sued for letting a ten-year old operate a virtual brothel? Can it be sued by players who suffer real financial damages at the hands of a virtual mafia?
  4. Can developers be sued for impeding free market forces that generate real monetary value for players? (An especially interesting question, given that those forces are the key to many other potential liabilities on this list).
  5. What forms of gambling are permissable in an MMOG? Is it really legal for me to play slots in Second Life, given that SL currency has real world value?
  6. Do players have a right to free speech and expression? Can game EULAs contain (and developers enforce) a morals clause, like those in some employment contracts?
  7. At what point (if any) does a developer become liable for failing to prevent players from harrassing other players? What constitutes sexual harrassment?
  8. If virtual property has tangible value, how badly does a player need to violate a game’s EULA before a developer may evict them… without compensation for their virtual property?
  9. Can players use legal means to prevent the deactivation of an MMOG, or to force developers to open source a game prior to deactivation? (i.e. to protect the value of their property?)

I wonder how long it will be before the first in-game court system pops up in an MMOG….

PS. If I’ve missed any notable legal demons, don’t hesitate to comment.

22 Responses to Potential Liabilities Faced by MMOG Developers

  1. All interesting points. It makes me wonder when people will sit back and see that they could potentially pollute the virtual worlds people pay to play in with the same things some people try to escape from by playing online games.

    How much fun will it be if you have to worry about being sued for doing something in-game because another player or the company running the game does’nt like it or fears a lawsuit from another party? It’s scary to me in a way, to have such things infringe on my enjoyment of an online alternate reality. Very frightening indeed and sad.

  2. The list is essentially endless. Pick any area of law and you’ll find myriad potential problems. Tort: Liability for all manner of negligent and intential infliction of harms, typically economic but also encompassing emotional or psychological damage these days. Jurisdiction and conflict of laws: Which jurisdiction applies to actions taken in the virtual world, and why? Does the ToS govern transactions within world or does the sovereign of the place of residence/server/etc govern? Contract: Can the EULA remove fundamental rights of physical residents of WhoKnowsWhereylvania, and under what laws (VW? State, etc?) are contracts perfected in world? Admin/Con law: is there a quasi-takings claim when Linden nerfs the transportation system thereby affecting the property value around TeleHubs, or Blizzard nerfs the stats on the [Demonslayer]. Finance law: what tax implications accrue to developers for transfer of valuable assets in world? Are game publishers subject to banking regulations under current state laws? Are contracts for the purchase of valuable assets within world subject to securities law?

    Etc etc.

    Dan.

  3. You should take a look at their blotter to get a feel for the other problems they will (and are) dealing with. I’m not sure when they added this feature but it is really fun to read:
    http://secondlife.com/community/blotter.php

    Two of my favorites
    Date: Wednesday, December 28, 2005
    Violation: Community Standards: Assault, Scripted Objects
    Region: McFee
    Description: Use of weapons.
    Action taken: Suspended 14 days.

    Use of weapons! That’s right, objects obey physics and physics can kill you. Or in this case really annoy you. The use of push bots is not new and residents can (if they are adept enough) script objects to swarm users and “push” them or “pin” them.

    Date: Friday, December 30, 2005
    Violation: Terms of Service: Global Attacks
    Region: —
    Description: Conspiring to intentionally crash region
    Action taken: Suspended 7 days.

    that’s right, virtual terrorism! I’m not entirely sure how they are pulling this stuff off but I would bet it has to do with scripting as well. The virtual world is segmented into servers so I don’t think one would cascade a failure however it is interesting that users can cause such endemics. I have a feeling that secondlife is going to get more interesting with time and likely will have it’s own police force (inworld only of course) soon.

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  6. David, in response to your last question about MMOG courts:

    There was a user-created court system developed for Second Life – details at The Second Life Herald [http://www.dragonscoveherald.com/blog/index.php?p=962]
    The system relied on voluntary compliance among participants and so was relatively useless. There is also an in-world notary service run by a user who is now apparently an employee of Linden Lab (makers of Second Life).

    I read recently somewhere (no link, sorry) that Socioltron has an in-world court system that involves user participation — the system, as I understand it, is supported by the makers of the game.

  7. TW — thanks for the great link. :)

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