Bringing Reality To SecondLife: Lots of Countries, Lots of Laws

With all the ups and downs since Linden Lab stated a new policy on inworld banking, a lot of reality has been creeping in for some people - and there is little virtual about this reality.

First and foremost, it does seem more and more apparent that Linden Lab's action was one of self-preservation in light of a lawsuit. You can dress a duck in whatever clothing you wish, but at the end of the day it is still a duck - and I am hard pressed to find a precedent of 'Good for users but no big deal for us' in anything Linden Lab has done. So let us say that the lawsuit that Lindsay Druart mentioned is real - in fact, I am almost 75% certain it is real based on some more recent information.

Now, lets go visit this (very welcome) post by Benjamin Duranske:

Fumble #2: “The contract says it’s not money, so the law doesn’t apply!”

Two people cannot privately contract to change the law. Consider this case: an employer and an employee sign an agreement that the employee will be paid $2.00 an hour, well under the federal minimum wage, but include language that “the payment of this amount of money shall represent a full payment of minimum wage under federal law.” The clause means nothing, because employment law isn’t concerned with what these people privately agreed — the employer is still on the hook for the violation. Similarly, users of virtual worlds have agreements with the provider that say that the provider does not have to buy back the currency, and that under the agreement, the currency represents merely the right to use the service. That does not mean that the currency, in fact, has no value from the standpoint of criminal law, tax law, securities law, or any other area that invites analysis of value.

The rest of Benjamin's post is all very good and recommended reading by anyone with a serious outlook on synthetic worlds. Now onto Aldon Hyne's latest post, :

...One issue that needed to be addressed in establishing an effective microcurrency is that the Internet is global and microcurrency needs to be transnational...

Exactly.

So what we have is negotiation of International Law for a Synthetic world that spans most of the broadband connected globe. In every country, there are Laws. Sometimes the Laws are compatible, sometimes not, but there is some variance. In one country, a contractual Terms of Service may well be something that will stand up in a court of Law - if it does not subvert the Law of the nation involved. And the citizens of that nation have those laws to protect them. This is an important aspect of [w:Internet Governance] that most 'virtual world experts' seem to ignore in the hope that it will go away.

Guess what? It won't. What needs to start is an international discussion on these things - something which has been tried since the [w:World Summit on Information Society] but has been neglected most by the country which houses some of the more significant international virtual worlds. And the price of the decisions not to participate, or to participate in only a small way, leaves all sorts of trouble brewing at the real borders of synthetic worlds. And in some parts of the world, it would be expected that a company could be held liable for their service - and that even the attempt to claim something is a fictional currency would not hold sway over a Court of Law.

'But the Contract states that only one geopolitical Law applies'. Of course it does, but whether that subverts the Law in a user's country is a completely different thing. And suddenly, we find ourselves in the world that people lauded as experts have been avoiding like the plague: Trade agreements, Sovereign Rights, International Law and Financial Regulation.

You can't really have an economy that serves an international audience without it being regulated by international Laws - directly or indirectly. It is, quite simply, a reality.

And that reality - a reality known for quite some time before 'virtual worlds' became popular - cannot be avoided. Each one of these issues that we see and will continue to see is only a symptom, a cough.

Meanwhile, the tuberculosis persists despite cough medicine. You can discuss the cough medicine at length, but until you treat the disease - the coughing will not go away. It will become less intense here and there, but the cough remains.