Producers and users of virtual spaces are heading toward difficult times. These could be made worse through increased regulatory intervention by various countries. I suggest that it is in the best interest of users, produces and nation states alike that those online service providers that use virtual items and currency form self-regulatory body. I suggest further that sport provides a ready-made governance model that the online industry should adapt and adopt.
I thus propose the formation of an: Online Dispute Arbitration Board (ODAB)*
*An academic treatment of this was first presented at The Game Behind the Game by myself and Dr Melissa deZwart.
1 The Problem
Individuals are investing time and money into virtual items but when things go wrong they are seemingly left with no rights and nowhere to turn other than the law. That is there are a number of circumstances where individuals lose access to virtual items or currency in a way they feel is unjust.
Courts and statue are increasingly recognising this position unjust and are finding in favour or users.
This has created a difficult situation where virtual items have a heterogeneous set of rights, which differ widely from jurisdiction to jurisdiction, associated with them. What’s more as the industry grows; cases become larger and more frequent; and, more property like attributes are associated with virtual items - heavy handed regulation that looks very much like real property and / or currency regulation will appear more attractive to lawmakers. This is especially the case as virtual itmes are no long restricted to MMO's or other online games.
Such regulation is likely to have a chilling effect on the industry especially innovation and thus will reduce the choices open to consumers. That is if the regulation is not written such that it inadvertently decimates one corner of the industry that fell outside of the model that law makes had in mind at the time of drafting.
Thus what is required is a system that can provide justice to the individual while not requiring a potentially problematic and inconsistent statutory definition of virtual items – a seemingly intractable problem.
2 The Solution
2.1 Sports regulation
The way to square the virtual item circle can be found in the regulation of sports.
There is something odd at the heart of many sports. However this oddness is so normal that we often forget that it is there. That is, in many sports people regularly do things that would be illegal in any other circumstance. In contact sports, say boxing, people hit each other with intent to hurt. In some cases people die through these encounters; however, just so long as the rules have been followed no one is arrested. Indeed the very thought of walking onto a sports field and arresting everyone for assault is ridiculous.
What sports law and sports governance do is provide a highly sophisticated normative influence on the conduct of sports and sports people. Governance is layered – there tends to be: in-game governance by officials, sometimes with replay facilities, club / league governance, national governing bodies, international sports federations and the international court of sport. The officials tend to ask ‘was act X within the rules’, layers above this tend to decide questions such as ‘was act X so outside the rules that other action is needed’ and ‘in judging act X where the rules applied properly’.
What’s more these structures do not preclude either the intervention of statutory bodies or appeal to such bodies. Hence if one player strikes another player the following layers might apply:
Official: Was it within the rules > no action
Official: Was it outside the rules and impacted play > in game sanction
Team / League: Was it far outside the rules > fine / suspension
Statue: Was it outside what could be reasonable expected / reasonable consented > criminal offence
Similarly if a player disagrees with a decision they may take it through the governances system on the basis the rules were miss-applied, similarly the may (and do) take legal action on grounds such as breach of contract – where a sporting body is seen as having a contractual duty to apply its own rules.
What is key in all of this is that there are a whole set of acts that are judged contextually. Thus in a game of physical contact it is only in the very extreme cases when the question ‘was that contact assault’ ever relevant – even though in any other circumstance it would be.
Hence the legal status of the act is purposely left under-determined, as a determination is not required for most normative purposes in the given context.
2.2 Virtual Item Regulation
Both the philosophy and structure of sports regulation can be applied to virtual items.
There are not direct parallels for each layer of sports and online services but an approximation is as follows:
Match official < > Guild and / or GM
Team < > MMO Publisher
Sports Governing body < > Online Arbitration Body
3 Operation of Arbitration Body
The primary function of the arbitration body would operate by assessing incidents where an individual was denied access to virtual items in a way that they felt to be contrary to the sprit of the rules outlined by the service provider in question.
In the case of both games and non-game online services that utilised virtual items this would include incidents such as:
- Suspension / Banning through not following rules / fair play / community standards
- Theft through hacking / duping / coercion
In the latter case the perpetrator may also face criminal proceedings the arbitration board though would operate in respect of the return of the items to the victim – something that may (or may not) fall outside the view of the criminal justice system.
Appeal to the arbitration board would typically be defined within the Terms and Conditions of the service provide but would only be applicable when the providers internal appeals system was exhausted.
Appeals may require a fee on behalf of users to cover, in part, administration costs and, in part, as a way to dissuading frivolous uses of the system.
The kinds of outcomes the board would determine would include:
- Re-instalment of items / account
- Return of market value of items
- Compensation e.g. subscriptions
- Public sanction of publishers in cases or egregious miss application of rules
- Public sanction of users in cases or egregious miss application of arbitration system
3.1 Benefits of the proposal
Cheaper - Arbitration tends to be cheaper than law. Even when quasi-judicial bodies are established these tend to be less costly than legal actions. Further, the existence of an arbitration body does not preclude the option of legal action, as we see in sport.
Better - Assuming that ODAB can attract the right mix of individuals it should provide a better process than the courts, at least in the short term. This is because, as with sports, ODAB will have individuals that understand the details and culture of online games, hence will understand the issues at stake for all the actors.
Regulatory burden - A governing body that has normative power on players and publishers relieves the burden on states, at least in part, from enacting legislation and creating statutory bodies to deal with the issues that begin to arise in greater numbers from online games. This is particularly important as online games tend to be international and states tend to act first on a heterogeneous national basis and then take some years to come to forms of international consensus – all of which is time consuming and costly.
Regulatory peril - From a publisher’s perspective, an independent arbitration board may give states confidence that citizens will be sufficiently protected as customers of online games such that they do not need to pass the legislation and create statutory bodies noted above. The peril for publishers is that any such action runs the risk of having serious intended or unintended consequence on the industry as it is hard to pass laws that capture the nuance and dynamic of individual games. Here again the sports model is apt as states tend to regulate by law the rules of individual sports.
3.2 Dis-benefits of the proposal
Insufficient volume – currently there is a low volume of disputes that are taken to court hence costs of any arbitration body are likely to outweigh any savings from the few disputes it might hear. As stated aboveI feel that the number of cases will increase but we concede that it is difficult to know when the best time to set up an arbitration body would be and that it may initially be financially inefficient.
It will be ‘griefed’ – almost all systems of online game norming are exploited by some players, the same will happen with an arbitration board with players simply wanting a cheap way to grief publishers. The scope of the arbitration board must be defined such to filter out griefing, for example a rule would be that publisher’s dispute systems are fully exhausted before the arbitration body is evoked, fees may be involved, cases may be publisied.
There is no publishers’ association – the online game industry has no recognised body hence it is unlikely that publishers will recognize the arbitration board. Initially the arbitration board will have to work directly with publishers and existing associations e.g. some publishers of online games are members of general publishing associations such as UKIP in the UK and ESA in the US. More broadly the lack of self-identification of online publishers is seen as a barrier to the creation of an arbitration body.
It is not peer based / lack of player representation – it is likely that the body will be made up of publishers only hence will be bias and fail due to lack of credibility. This is a challenge for the body especially as funding is likely to come from publishers. Thus the constitution of the body that publisher agreed to must ensure representation of players either through other bodies or non-publisher individuals.
Some form of arbitration system to resolve serious disputes about virtual items is the best mechanism for users, publishes and nation states as it provides a contextual, commensurate way of determining just remedies in an increasingly important aspect of many peoples lives without the necessity of legislators to try to understand and regulate an ever changing, complex set of online relationships centring on virtual items.