Legal Research

Virtual Money

By John Gregory

Is there any reason why Canadian law would not enforce value established, earned or conveyed in a virtual world, assuming the appropriate evidence were available? (Speculation on what kinds of evidence might be available is welcome, as is most speculation on this website.)

Here are a couple of articles about Facebook?s ?online virtual currency?, the first largely favourable, the second mentioning some enforcement problems. (I can?t access FB from the office to see what its official view might be.)

• ThinkRisk, “If Only They Were ‘Virtual’ Losses?”
  (this one has links to other sources too)
• “Zynga on the Hook for Virtual Currency Ads” by Maria Dinzeo, (class action against FB games developer for misusing personal information collected in exchange for virtual cash. What do you think of the representative plaintiff?s argument that the games are so unattractive without virtual currency that users are almost obliged to apply for it, but it?s unfair for the suppliers to use the PI provided to get it?)

Some virtual worlds (notably Blizzard that runs World of Warcraft) prohibit any out-of-world transactions about in-world property. Why would such provisions be enforceable, or even desirable?

Others (notably Linden Labs that run Second Life) permit and even encourage real-world exchange of in-world money for real-world currency.

The Pillsbury law firm has a practice devoted to virtual worlds, and has a primer [PDF] on legal issues about virtual currency: .

Should the Bank of Canada be taking notice? The Think Risk site says that the value of such currency may be $1 billion or more. I suppose that?s not very large compared to the value of all currency in circulation, and the money supply is more than currency. But it?s enough to attract the attention of entrepreneurs and their lawyers.

Greg Lastowka has perhaps the most recent book on virtual law, called ?Virtual Justice?, available in its entirety online [PDF] (no ?piracy? required ? but note that copyright is (properly) asserted even if the distribution is free). The older book on the topic that I am aware of is by Ben Duranske, ?Virtual Law?. Davis LLP in Canada has a ?video games? practice that seems to extend to virtual worlds. No doubt there are other sources of information and comment ? but what about yours here?

Full post as published by Slaw.ca on November 16, 2010 (boomark / email).