Online Gamer Sues Over Virtual Land Dispute
A virtual land deal gone awry has led to a real world court battle pitting a Web-savvy attorney against Second Life, a 3-dimensional Internet world game created by San Francisco-based Linden Lab. The lawsuit, perhaps the first of its kind, was filed in W. Chester, Pa., small claims court. It seeks $8,000 in financial damages, in part for a breach of a virtual land auction contract and for violation of the state’s Unfair Trade Practices and Consumer Protection Law.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
Lawyer Marc Bragg, who specializes in consumer rights and cyberlaw cases, bought virtual land using real U.S. currency after learning how to buy property significantly below market value and sell it at a profit. Bragg claimed that Linden employees allowed an auction where he bought the property, but then cut off his account without explanation. The company has since refused to offer Bragg a credit or refund, he said. Bragg said his calls to customer service and Linden’s lawyers have gone unanswered.
Second Life, an online game inhabited by more than 200,000 people from around the globe, is one of many Internet simulation-game sites to gain steam in recent years, Bragg said. The game allows players in a virtual environment to gamble, have sexual encounters and buy and sell real estate. Some players have turned their virtual endeavors into real-world incomes by creating virtual clothing stores, dance clubs and adult nightclubs, Bragg said. Some speculate that there are in-world players collecting 6-figure real-world incomes from virtual entrepreneurial efforts.
Bragg, who owns a couple of hundred units of virtual land where he built a casino and condos, was working on establishing a blues club before he was booted from the game. He claimed that Linden is holding about $2,000 of his money, which he has tried unsuccessfully to transfer back to his account via PayPal. “These games are like the virtual Wild West, but Linden Lab is still obligated to honor real-world contract law and consumer law, even if their world doesn’t really exist,” he said.
Second Life’s total virtual economy accounts for an estimated $60 million annually and the game generates thousands of dollars daily from members buying virtual items like cars, homes, clothing and land, the complaint said. Money invested through the game is converted into “Lindens,” Second Life’s currency. The company has attracted $11 million-plus in venture capital, and has backing from Amazon.com founder Jeff Bezos and other high-profile industry leaders, Bragg said.
The suit brings to light complex issues that haven’t been addressed in the real world about the popular sites, Bragg said. Since the game uses currency that can be converted into U.S. dollars, he questioned how items like gambling revenue, income from virtual land sales and other virtual purchasing issues will be addressed by Linden and other companies like it in the future. Bragg said he wants to get the squabble out of the way quickly. If the dispute is resolved in his favor and Linden lets him return to the game, Bragg said he would continue to play Second Life. If the firm refunds his money on the condition that he leave the community, that’s fine too, Bragg said. “There are plenty of other things to do in life,” he told us.
The Better Business Bureau in Oakland, Cal., which handles complaints about San Francisco firms, processed 2 cases involving Linden in the past 3 years. One involved billing or collection issues and the other dealt with customer service. Both were resolved. A spokesman for the Cal. Attorney Gen.’s Office said he hadn’t heard about any cases involving Linden and a spokeswoman at the state’s Dept. of Corporations, which handles various licensing and regulatory issues, didn’t know about the case. Bragg sent a letter to the FTC informing the agency of his dispute over Second Life. The case is being addressed by Linden’s attorneys, who wouldn’t speak with reporters before filing documents with the court, the firm’s marketing dir., Catherine Smith, told us.
George Washington U. law prof. Orin Kerr said the case is “just a standard breach of contract claim, not a claim about ‘virtual land.'” Bragg is claiming he bought a set of rights that the defendant didn’t give him, said the former DoJ Computer Crime & Intellectual Property Section lawyer. Despite the online angle, it’s “pretty old-fashioned,” he said.
A central issue in this case may be whether Linden’s purported knowledge that users are buying and selling virtual objects created in Second Life in the real world can prevent it from terminating a user’s account for doing so, said Lauren Gelman, assoc. dir. of Stanford Law School’s Center for Internet & Society. “As more objects are created in virtual spaces like Second Life, it will be interesting to see how courts draw lines between the virtual and real world,” she told us.