Business in Virtual Worlds, Second Life

Theory of Property and Rights in Virtual Worlds

A while back I wrote a lengthy piece on the concept of property, avatar rights to property, and what we mean when we, as users, get in a “huff” about the latest shift in the winds by the Lindens.

At “In the Near Future” the writer agreed to my philosophy but also argued that platform providers would always be motivated by profit.

I had summarized Benkler in saying:

“The question of “who should own this spoon” should be understood as a question about what we want the social relations using the platform to be like.”

And then had argued that there was a benefit to the idea of platform providers building their worlds upon an explicit social relations underpinning, accompanied by a forum for listening to their users before and in order to make their god-like changes to the code.

Over at In the Near Future (“ITNF”), the response was:

I get that the point of Dusan Writer’s post here is about the decisions of the platform owners and the ‘suggestion’ that they should make those decisions with the input of the participants, but I would argue: what authority do the players have other than that derived from their choice to participate?

My response is that my philosophy of how to treat the issue of virtual property was a pragmatic one, in the end, for the platform providers. There is NO clear legal basis that by giving up their rights by signing a ToS or EULA that players have lost their rights or authority in their relationships with platform owners. According to most authorities (except perhaps China which recently announced a state-sponsored virtual world!!!….now in THAT case the participants REALLY won’t have any rights), as soon as objects become valuable they become commodified and once that has occurred the possibility for damages exist. Once the possibility for damages exist, the law intrudes.

The law does not de facto protect the rights of the platform users anymore than it protects the rights of Enron, or Exxon…the law may tilt in the favor of corporations in some jurisdictions but it does not rest solely on their side.

However, as Larry Lessig first proposed in 2001, synthetic worlds may require unique legal jurisdiction – they are global and exhibit unique characteristics that make application of “real world” precedents difficult.

One of these unique things is the existence of the platform provider and the argument, as made by ITNF, that these platform providers have a right to make money, and that “players” sign away their rights – in effect, if you agree to play, you agree to play my way, and that’s all right because the profit motive prevails – if you don’t like it, move to another platform.

However, as Castronova pointed out in his seminal book Synthetic Worlds, these platforms do not exist in a magic circle – rather there is a membrane between the ‘real” and “synthetic” worlds. Because the membrane is porous, this means that the real world intrudes into these virtual spaces whether in law, politics, culture or economics. As much as platform providers would like to merrily keep on making their decisions and earning money how they want to earn money, the seeping through the membrane is happening – the law will, and is, intruding.

Laws are starting to force platform owners to take actions, make decisions, release information, and change their code because someone in the “real world” has come to harm because of stuff that has happened in the “virtual world”.

This however leaves virtual worlds open to the challenge of protecting the magic circle. Although there’s a membrane rather than a solid wall around the magic circle, platform owners are compelled, to one degree or another, to protect the fidelity of game play in order to do what you’ve just said – protect their financial interests. If a game doesn’t “feel” like a fantasy, less people may be attracted to it. But since different worlds want to apply different rule sets, how do you reconcile the rights of platform providers to create “immersive spaces” with the laws that are bound to seep into those spaces due to the membrane?

My argument is for platform owners to tacitly build social relations policy into their world-building. One company, for example, might decide to create a world based on the triumph of communism. In its world, everyone owns everything equally – to each according to his need, from each according to his ability. They build this social policy into the code set and make it explicit to the users.

OK, so the lawyers come along – a user has claimed damages within the virtual world because their loaf of bread, sold on eBay, was “stolen” by the communist overlords in the game. The user sues the platform owner because their opportunity for gain was hindered. The courts say “damages are damages, regardless of EULAs” (as they have begun to do, ignoring EULAs entirely for the most part). But the platform provider argues that the issue is not one of EULAs but rather the protection of the social policy (and thus the code) that is the basis for the “contract” within the game space.

My argument is that different worlds will operate on different assumptions – they will hard code social policy into their worlds. This hard coding should be their argument in the courts for why certain activities on behalf of the platform preculde legal remedy by the users. The platform owners can point to their social policies within the world and say “look, this is what we’re all about, this is how we protect this policy within the world, and this is how this specific legal suit should be viewed – because this underlying policy is what keeps our platform in business”.

Without, however, a viable feedback loop from users, users could argue that in fact a specific action contravenes the stated social policy – that with no opportunity for communication with the coding authority, or no response to their pleas, the liability has shifted back to the platform owner.

While I know my original argument may have sounded “squishy” – “oh, let’s all share a world together, get along with the Lindens, and be one big happy family” my motivation was in fact driven by the idea of making sure we protect the membrane, because the law is a coming (has already arrived) and I’d like to protect our synthetic worlds as much as possible from the encroachment of the lawyers and politicians (if you don’t mind!)

If you can think of a different way to argue in what ways law might be restricted in its ability to legislate the cultural, gaming, and coding context of our virtual worlds, I’d love to hear it.


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