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Author Topic: Is the Diablo3 RMAH illegal?  (Read 3711 times)

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GenericKen

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Is the Diablo3 RMAH illegal?
« on: June 15, 2012, 05:00:13 pm »
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Short answer, probably not as a whole, but the Real Money Auction House is unprecedented legally, and this is the smartest forum I know. I was hoping to generate some legal discussion.

With the RMAH, ActiBlizzard tacitly endorses its virtual items as having monetary value, and encourages players to exchange those items with each other while profiting via a transaction fee.
https://us.battle.net/d3/en/forum/topic/5826223021


1) What can and can't ActiBlizzard do to affect the value of its items? It probably can't shut down the game, and it probably can't have its employees selling stuff in the RMAH. Can it nerf items? Can it "purchase" items off of the Gold AH to stem inflation if it would shrink supply and drive up Real money?

2) Is Diablo 3 subject to gambling regulation as a game of chance? The game involves some skill, but it's very loosely tied to the quality of the drop.

The EULA has all kinds of language about how items are owned by Blizzard and are only leased to players, but in that case, items aren't that different from casino chips, which are "leased" to players.
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Taco Lobster

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Re: Is the Diablo3 RMAH illegal?
« Reply #1 on: June 15, 2012, 05:27:10 pm »
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Blizzard can do whatever they want, including shutting down servers, nerfing items, or flooding the market.  They may have some restrictions on whether they can sell on the platform, but I don't know much about that area of the law.

The basic issue here is that the virtual goods do not exist.  You aren't leasing anything.  You're exercising a limited license to use their software.  They can change that license at anytime without your consent, and if you want to use the software some more, you'll have to agree to the terms of the new license.  That's the difference between this and most other commercial transactions - you usually don't sign an elaborate contract with the other party when you purchase the goods.  You purchase them, and rely upon the Uniform Commercial Code or some similar law which provides for terms of a transaction when the parties don't specify them.  When the parties do specify terms (as is the case with a license), those terms control unless they are somehow illegal or unenforcable. 

I can't imagine that the gambling laws apply to it.
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jonts26

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Re: Is the Diablo3 RMAH illegal?
« Reply #2 on: June 15, 2012, 05:39:39 pm »
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I'm not a lawyer, but I expect that Blizzard has a whole army of them. And either they made sure what they are doing is clearly legal, or theyre ready to set a precedent if they somehow get sued.
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Davio

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Re: Is the Diablo3 RMAH illegal?
« Reply #3 on: June 15, 2012, 05:52:23 pm »
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You agreed to the EULA so they can do what they want.
If you don't agree, don't use it.
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DG

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Re: Is the Diablo3 RMAH illegal?
« Reply #4 on: June 15, 2012, 08:52:29 pm »
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Perhaps you should think of it like a theatre offering to re-sell tickets for people who can't make a performance.
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DStu

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Re: Is the Diablo3 RMAH illegal?
« Reply #5 on: June 16, 2012, 02:51:10 am »
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Blizzard can do whatever they want, including shutting down servers, nerfing items, or flooding the market.  They may have some restrictions on whether they can sell on the platform, but I don't know much about that area of the law.

The basic issue here is that the virtual goods do not exist.  You aren't leasing anything.  You're exercising a limited license to use their software.  They can change that license at anytime without your consent, and if you want to use the software some more, you'll have to agree to the terms of the new license.  That's the difference between this and most other commercial transactions - you usually don't sign an elaborate contract with the other party when you purchase the goods.  You purchase them, and rely upon the Uniform Commercial Code or some similar law which provides for terms of a transaction when the parties don't specify them.  When the parties do specify terms (as is the case with a license), those terms control unless they are somehow illegal or unenforcable. 

I can't imagine that the gambling laws apply to it.

Sounds to me that Farmville is in trouble (if they still exist...)
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GenericKen

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Re: Is the Diablo3 RMAH illegal?
« Reply #6 on: June 16, 2012, 01:57:24 pm »
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TacoL- technically, the same argument could be made for and digital goods (books, mp3, movies, software).

Eula's aren't enforceable if they overreach. Saying "we can do whatever we want" might be an overreach. I believe that the customer would have civil recourse if MS or Appl decided to remotely shut down their OSes or if Amazon pulled a digital book without offering a refund.


As for gambling, why not? Players can spend money and win money *without* direct control over how much they win.

How different is it from a casino offering all you can play on a slot machine for a day for $100, or from them renting out poker tables with dealers?
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Davio

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Re: Is the Diablo3 RMAH illegal?
« Reply #7 on: June 16, 2012, 02:40:29 pm »
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I disagree that virtual items don't exist.

They represent time and effort and thus money. Not long ago there was a ruling that stealing items in RuneScape was more or less the same as stealing irl.

Here's the verdict.

It's not that agreeing to the EULA gives Blizzard the right to do anything they want, but you're just leasing their software, you don't own it.
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Kirian

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Re: Is the Diablo3 RMAH illegal?
« Reply #8 on: June 16, 2012, 04:29:26 pm »
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Short answer, probably not as a whole, but the Real Money Auction House is unprecedented legally
Zynga would like a word with you, as would a lot of pay-for-item games on Kongregate.

Quote
With the RMAH, ActiBlizzard tacitly endorses its virtual items as having monetary value, and encourages players to exchange those items with each other while profiting via a transaction fee.
Because they'd rather get the transaction fee than Paypal, and since the transaction happens within the game, there's no possibility of fraud between players.

Quote
1) What can and can't ActiBlizzard do to affect the value of its items? It probably can't shut down the game,
Tough call.  My suspicion is that with a certain amount of notice--say, six months--they could shut down the RMAH for those six months, then shut down the servers, and a challenge wouldn't hold up legally in court.  Note, though, that you can still play D2 online, and original Brood War as well if I'm not mistaken.  Blizz isn't likely to shut down servers unless they go bankrupt.

Quote
and it probably can't have its employees selling stuff in the RMAH.
Depends on the employee.  Their CMs and GMs generally won't have the ability to spawn items.  I'm betting, though, that the employees probably are locked out by Blizz.

Quote
Can it nerf items?
Yes.  Hard to claim that's an overreach of the EULA.

Quote
Can it "purchase" items off of the Gold AH to stem inflation if it would shrink supply and drive up Real money?

Yes, just as Blizz could create items and sell them; again, cf. Zynga.  My guess is that neither of those would be a good idea; if they decrease inflation by buying items, that item cost is going to players and might not be made up for by increased trade fee revenue.  Likewise, if they create items and dump them on the RMAH, they'll make money in the short run, but cause a drop in market prices that might decrease trade fee revenue in the longer term.  Were I Blizzard, I would not want to speculate on that sort of thing.

Quote
Is Diablo 3 subject to gambling regulation as a game of chance? The game involves some skill, but it's very loosely tied to the quality of the drop.
Tough call there, I lean toward no, for the simple reason that it is impossible to lose the game of chance.  The only way to lose money is to buy something.  The game of chance portion is more akin to "Hey, here's a big bowl of stuff.  Grab something random, it's free to try your hand!  If you can sell it to someone, great!  If not, well, um, anything free is worth what you paid for it..."
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Ozle

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Re: Is the Diablo3 RMAH illegal?
« Reply #9 on: June 16, 2012, 05:35:19 pm »
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I'm pretty sure blizzard would have checked into it far deeper than any forum discussion could possibly look.

And it's not an unprecedented step in the slightest, second life has been doing it for years hasn't it?

I remember when Norrath became the 38th largest economy in the world...
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theory

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Re: Is the Diablo3 RMAH illegal?
« Reply #10 on: June 17, 2012, 12:58:35 am »
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BTW, it should be clear that virtual goods are treated no differently from real goods, since your bank account is just "virtual", after all...
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Ozle

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Re: Is the Diablo3 RMAH illegal?
« Reply #11 on: June 17, 2012, 05:13:50 am »
+1

BTW, it should be clear that virtual goods are treated no differently from real goods, since your bank account is just "virtual", after all...

As the Greeks have found out!
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Davio

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Re: Is the Diablo3 RMAH illegal?
« Reply #12 on: June 17, 2012, 05:18:26 am »
+1

BTW, it should be clear that virtual goods are treated no differently from real goods, since your bank account is just "virtual", after all...

As the Greeks have found out!
No money is still no money, whether it be virtual or real.  :D
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Taco Lobster

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Re: Is the Diablo3 RMAH illegal?
« Reply #13 on: June 18, 2012, 11:55:08 am »
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The dollars in your bank account have real life analogues.  They are a record of real goods.  Similarly, a purchase order for a good is a representation of an actual good, it is not the good itself. 

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DStu

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Re: Is the Diablo3 RMAH illegal?
« Reply #14 on: June 18, 2012, 11:58:57 am »
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The dollars in your bank account have real life analogues.

And these are? Funny green sheets of paper with pictures of dead men? Could as well been sorted bits on a HDD if nobody would believe in it...
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Taco Lobster

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Re: Is the Diablo3 RMAH illegal?
« Reply #15 on: June 18, 2012, 12:02:52 pm »
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TacoL- technically, the same argument could be made for and digital goods (books, mp3, movies, software).

Yes, that is also a license.  See also the incident with Kindle where they pulled virtual books.  It's as easy as that - you don't own anything, you hold a license to view things, and that license sets forth the terms and conditions of your use.  In some instances, these licenses are simpler and resemble standard ownership.  However, that is a function of the license, not the good.[/quote]

Eula's aren't enforceable if they overreach. Saying "we can do whatever we want" might be an overreach. I believe that the customer would have civil recourse if MS or Appl decided to remotely shut down their OSes or if Amazon pulled a digital book without offering a refund.

Sure, a license could overreach.  Any contract could.  You can believe whatever you want about the availability of civil recourse, but, so far, no court has done much to curb software licenses.  It could happen - those licenses get more aggressive every day - but I'm not aware of a push in that direction of jurisprudence.


As for gambling, why not? Players can spend money and win money *without* direct control over how much they win.

How different is it from a casino offering all you can play on a slot machine for a day for $100, or from them renting out poker tables with dealers?

I believe Casino games are characterized by being based largely on luck, but I don't know for certain.  Plus, the primary point of Diabolo is not to win money through the auction house.  If this is gambling, then so is selling Magic cards or Pokemon cards.
« Last Edit: June 18, 2012, 12:13:43 pm by Taco Lobster »
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Taco Lobster

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Re: Is the Diablo3 RMAH illegal?
« Reply #16 on: June 18, 2012, 12:08:22 pm »
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The dollars in your bank account have real life analogues.

And these are? Funny green sheets of paper with pictures of dead men? Could as well been sorted bits on a HDD if nobody would believe in it...

*shrug*  You can go to the bank and turn those bits into something physical.  Good luck getting the same result from the +4 flaming shield. 

There are virtual goods sold and treated as if they were not virtual (e.g., futures contracts or a patent right).  That doesn't change the fact that the auction house is part of a license to use software, and is no more an ownership right in the content than a rental agreement is ownership to the fridge in a rented apartment.  You have a right to use the fridge, you can exclude others from using the fridge, and if they use it anyway, you can bring charges against them.  That doesn't mean you own the fridge.  It also doesn't mean the rental agreement is unenforcable because the landlord can come in and take your fridge or replace it with a cooler and some ice (subject to ancillary laws relating to habitability of the premises/limitations on landlord conduct, obviously).
« Last Edit: June 18, 2012, 12:18:08 pm by Taco Lobster »
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DStu

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Re: Is the Diablo3 RMAH illegal?
« Reply #17 on: June 18, 2012, 12:22:41 pm »
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I just don't think that's because they are 'virtual'.

There are actually two issues in your last post, I think: First, how easy these goods can be transfered into other goods. Second, how 'stable' these goods are, and that 'someone' could in principle mess with this stablility.

But you have both also for 'real' goods. If you have a bunch of fancy MtG-cards, you also don't walk in a bank with them and leave it with something else than said cards. And if Wizards of the Coasts decide to change rules, or just reprint $powerfull card plenty of times, or another there's another game that kills Magic, the value will also drop.
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Taco Lobster

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Re: Is the Diablo3 RMAH illegal?
« Reply #19 on: June 18, 2012, 12:51:36 pm »
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I just don't think that's because they are 'virtual'.

I think that's fair enough, but the larger point remains that you don't own any of the virtual goods in Diablo.  You have a limited license to use those goods.  The fact that the goods don't exist means that the usual set of property rights that exist with regards to items over which physical control can be exerted must be recreated using a license or other contractual arrangement.  Your ownership is based on the rights granted under those agreements, and such ownership is of a very different quality and type as compared to physical goods. 

There are actually two issues in your last post, I think: First, how easy these goods can be transfered into other goods. Second, how 'stable' these goods are, and that 'someone' could in principle mess with this stablility.

But you have both also for 'real' goods. If you have a bunch of fancy MtG-cards, you also don't walk in a bank with them and leave it with something else than said cards. And if Wizards of the Coasts decide to change rules, or just reprint $powerfull card plenty of times, or another there's another game that kills Magic, the value will also drop.

I don't think that's on point.  The difference between a virtual good and a non-virtual good is that the former exists only as a set of contractual rights - as of yet, there aren't rights relating to physical exclusion (because that's impossible), which is the basis of most of the rights we take for granted with respect to non-virtual goods.  Each virtual good is subject to its own license/contractual rights, those licenses/contractual rights are qualitatively different from the common law/exclusion based rights of non-virtual goods, and neither maps well onto the other.  As a result, virtual goods are creatures of licenses/contractual rights, and the sum total of a person's rights with respect to those is set forth in and limited by the terms of such licenses/contractual rights. 

Edit:  This isn't to say that the law or the rights can't change in the future - there's nothing prohibiting Congress from adopting a law stating that if Blizzard sells you a flaming longsword, you have the same rights in the virtual object as you would in a physical object. 
« Last Edit: June 18, 2012, 12:55:30 pm by Taco Lobster »
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