The proliferation of virtual worlds has led to a rapid growth in the virtual economy, which some estimate at two billion dollars. But when a player of "Second Life" buys a virtual house with real money, who really owns it? Greg Lastowka, in his upcoming book, argues that while a game company's terms of service dominate now, our brick-and-mortar legal system may have to intervene.
BOB GARFIELD: This is On the Media. I'm Bob Garfield.
BROOKE GLADSTONE: And I'm Brooke Gladstone. In 2005, in the online world called Legend of Mir 3, Qui Chengwei acquired a dragon saber after long hours of play. It was one of the most potent weapons in this virtual world, with a market price in China of almost 1,000 dollars. His friend’s avatar asked to borrow the sword, but instead of returning it, Qui’s friend sold it and pocketed the cash. Qui first turned to the Chinese police, but it didn't regard the dragon saber as legal property and sent Qui away. So Qui went to his friend’s real home and killed him with a real knife, before turning himself in. Could the tragedy have been averted if the authorities had simply regarded the dragon saber as real property? Thus, the murky legal sphere known as virtual law. Greg Lastowka is a professor of law at Rutgers University and author of Virtual Justice: The New Laws of Online Worlds. Greg, welcome to the show.
GREG LASTOWKA: Thanks, happy to be here.
BROOKE GLADSTONE: Do you have any idea how much merchandise is exchanged in these virtual worlds, I mean, what kind of a business it is?
GREG LASTOWKA: The size of virtual economies, virtual property economies, is around two billion dollars a year.
BROOKE GLADSTONE: These are virtual worlds like Second Life and World of Warcraft. But even programs like Farmville on Facebook traffic in virtual property sometimes, right?
GREG LASTOWKA: That's right. Farmville is an application that runs on top of Facebook, and in Farmville you have an avatar and a little plot of land. What Farmville lets you do is send your friends messages and say, please help me on my farm, and you can help them out by giving them nails or horseshoes for their barns. And you might not have to pay a lot of money – you might pay 5 dollars, 10 dollars, 25 dollars – but you have enough people doing it, you can make a lot of money that way. So there are about 70 million people, I think, who play Farmville, and if 10 percent of them are paying, you know, 25 dollars for some gas for their virtual tractor, that adds up.
BROOKE GLADSTONE: Isn't virtual property owned by the company who owns the game?
GREG LASTOWKA: There was a case about this recently, Bragg vs. Linden Lab, where a lawyer bought thousands of dollars of virtual land in the virtual world of Second Life. And at a certain point the game owners decided that he'd done something that they didn't consider fair play, so they cancelled his account and confiscated all of his virtual land. And he brought a lawsuit, saying that they had unlawfully taken his property. The company didn't really address the issue of property confiscation but it said, before you actually started using Second Life you agreed to our terms of service.
BROOKE GLADSTONE: And, of course, we all read those with incredible care.
GREG LASTOWKA: The court found that the terms of service were an unconscionable contract that it would not enforce.
BROOKE GLADSTONE: Linden Labs, which runs Second Life, encourages people to open up businesses and to accumulate property, but then says in its terms of service, no matter how much money you spend, you don't really own this stuff and if you do something that irritates us, we can take it all away from you. This is what the court said was not enforceable. On the other hand, since it settled out of court, there’s no precedent.
GREG LASTOWKA: That’s exactly right. These terms of service for these online worlds are not completely bulletproof. But by and large, I think most legal commentators who look at this say that the companies do get to set their own rules.
BROOKE GLADSTONE: And in some worlds, theft is okay. In some worlds, murder is okay. Should their laws be determined by the consent of those who are governed in them?
GREG LASTOWKA: The way that the law is structured today, we are really kind of carving out separate jurisdictions online and setting up these virtual world owners as the governments of this sphere. It could be that real governments will be more involved in virtual worlds if things start going awry. In the Republic of Korea, for instance, they have a lot of broadband usage and a kind of deep history of online games, so their government has been very much on top of the issues of virtual property. And there have been thousands of prosecutions for virtual property fraud and theft in South Korea.
BROOKE GLADSTONE: Could you, if you were playing World of Warcraft in, say, Staten Island, New York, sue in Korea?
GREG LASTOWKA: This is something that the game companies are worried about. So World of Warcraft is owned by Blizzard Activision. It has a very sophisticated team of lawyers, and they sometimes tailor the software so that in different jurisdictions you have different rules and different contracts.
BROOKE GLADSTONE: Does this mean we're really going to have to read those terms of service?
GREG LASTOWKA: Well, if you do read them, you might not be able to understand them.
BROOKE GLADSTONE: Thanks so much.
GREG LASTOWKA: Thank you.
BROOKE GLADSTONE: Greg Lastowka is a professor of law at Rutgers University.