All’s Fair in Love and WoW: Virtual Theft May Elude Real Life Prosecution

 

As we have consistently seen this semester, the real world is struggling to adapt and solve virtual issues. As virtual currency and virtual businesses thrive, so too has the occurrence of virtual theft, fraud and embezzlement. This post will examine not only how the global legal system has reacted to these virtual crimes, but will also look towards morality issues that exist solely in the context of MMO player on player theft.

batman virt theft

Phishing scams on the internet are nothing new; many of us have known someone whose credit card information or identities were stolen through these types of malicious websites or simply clicking on a sketchy e-mail. With the surge in popularity of gaming and social networking sites (including every parent’s worst nightmare Habbo Hotel) hackers were able to change up their routine.[1] By creating fake webpages that induced Habbo users to input their account information and passwords, the scammers were then able to access these accounts and separate users from their virtual property.[2] Finnish police launched an official investigation in 2010 when user’s reported over €1000 of property lost, specifically virtual furniture which had been purchased or created by Habbo Hotel users.

Unlike phishing scams of the days of yore, which targeted easily quantifiable data like bank accounts and credit cards, virtual property unleashes a rash of new issues. The problem lies in the nature of the property stolen and as to whether or not that virtual property had real world value which may demand traditional tort recourse. For other players globally, the law normally provides no avenue of recourse for these types of thefts. Illustrative of so many users’ stories is Final Fantasy player Geoff Luurs experience when over $4,000 of his virtual currency and gods were stolen overnight.[3] Even though the victim provided police with a probable lead as to who the perpetrator was, a friend who of Luurs, police refused to investigate the incident in any way. Instead investigators simply told the victim “[virtual items] are devoid of monetary value,” and therefore no crime had actually been committed against him.[4] Putting aside the valuation issue for a moment, some argue treating virtual thefts as real world thefts would cause unnecessary strain on police. However, this argument falls flat because either theft of virtual property is a crime or it is not.  The penile code doesn’t fluctuate based on how many law enforcement officers are available that weekend.

When faced with these kind of tacit dismissals of the wrongs which have been carried out against you, combined with the already devastating loss of an item which may have taken a player countless hours and days to obtain, it’s easy to see the frustration and fatalist mindset an individual in this position might have. Enter the Dragon Sword: a valuable ancient sword from the game Legends of Mir 3.[5] This sword was loaned by one player to his friend on a temporary basis, but instead of returning the sword the borrower sold it on e-bay for a real world profit of about $870. Enraged, the player who had originally obtained the sword through painstaking gameplay attempted to file a police report with the Shanghai police, at which time the police told the victim that “no crime had been committed as there was no concrete evidence that could be presented.”[6] Without any legitimate or lawful recourse available, the victim-turned-vigilante murdered his former friend over the virtual stolen sword.[7]

One of the only cases in which real world prosecution came from a virtual theft was in a 2012 case in the Netherlands, which was ultimately upheld by the Dutch Supreme Court.[8] However, before jumping to the conclusion that legitimate legal precedent has been set, it is important to look at the extremely sympathetic facts of the case and the paralleled real-world crime that was occurring during the virtual theft. The case involved a 13 year old boy who was beaten until he succumbed to the attackers demands: drop valuable items he had obtained in Rune Scape so that another player (one of the attackers) could pick them up. [9]  It’s this real-world conduct that parallel the attack which both causes alarm and provides distinguishable grounds upon which other courts may rely in continuing to dismiss virtual theft.

Nevertheless, the Dutch Supreme Court did note the “virtual objects had an intrinsic value to the 13-year-old gamer because of ‘the time and energy he invested’ in winning them while playing the game.”[10] Although imperfect at best, this tiny recognition by a high court does weigh in favor of those gamers who are without recourse in redressing the wrongs that have been done to them. This idea that virtual objects have value should not be a foreign or novel object. For instance, think about any type of collection or antiques; a painting doesn’t have true monetary value, no collection of goods does. Rather it has value because we give it value, because a collector values it based on its scarcity and would be willing to pay X amount for it. We impute intrinsic value into tangible real-world goods all the time. Should virtual goods be any different? Particularly when people are willing to lie, cheat, steal and even murder for them?[11]

Yet even if society at large were willing to recognize a quantifiable value of virtual objects obtained in video games, should the virtual “theft” be categorized as such? Obviously not all cases are as clear cut as the Dutch case, but when there is no real world violence that supports the contention a crime has committed, should these acts be more readily defined as simple game play? In baseball, players “steal” bases all the time. This idea becomes all the more powerful when considered in the context of an MMO, where the defining nature of the game is to envelop oneself in a character and fantasy world so unlike the real world that traditional limitations no longer exist.[12] Think no further than SWTOR; players have the option of playing as a Sith warrior, where evil choices are not only encouraged by required! If the MO of these games is to completely submerse oneself in an alternate reality, then how can developers or courts dictate proper online conduct that is in line with the character’s motivation?

The key issue is drawing the line between double crossing your enemy as part of the online game, and a real world crime. Should we hold the real world person reliable for something they did in the game under their gaming persona? Certainly the answer should be no. Consequently, Robert Carli of MIT’s Department of Electrical Engineering and Computer Science suggests that virtual property-based torts should take into account the world in which the player was playing in.[13] However, it is my opinion that given the court’s lack of knowledge base in the virtual context this would be an unworkable option in practice. This past week, a sitting federal judge asked me what a blog was during an oral argument and then proceeded to analogize it to a cow dressed as a bison? To say the courts are unprepared to do a case-by-case analysis on the morality of game play in an MMO is an understatement. Furthermore, taking this idea to its ultimate conclusion, how would a court determine that it is without moral culpability for a “good” character to kill another inside the game but that stealing a player’s sword has gone too far?

Carli also suggests putting the onus on developers to provide more stringent rules on what is acceptable and unacceptable behavior inside their own game.[14] Thinking back to the pornography discussion last week, particularly how some fields are able to be free of government regulation if they prove they are able to self-regulate, this idea may be better suited for the gaming community than giving free reign over to the courts decide what is and is not acceptable game play. As it stands, developers licensing agreements have only a broad ban on selling virtual objects obtained in the game for real world profit stating that in-game objects have no value.[15]

However, these arguments and justifications do not apply universally. The standards which apply to constructs like Second Life are wholly different than the mythical worlds of WoW and Eve Online. SL was based on the concept that players could make a real world profit since the virtual money could be freely exchanged for real world currency based on a “market-determined floating rate.”[16] As such Second Life is holding itself out as a sound business opportunity rather than a game whose sole purpose is entertainment and any money lost could be attributed as a cost of that entertainment. These fundamental differences, a focus on property trade rather than immersion in total fantasy, mean different player objectives and different standards regarding “socially” acceptable conduct. Thus, a theft in SL should be recognized as a virtual theft based on the standards with which the community imputes into the environment.

Similarly, a theft targeting Bitcoin—virtual currency with an exact, easily calculable real world exchange rate[17]—should also have real world consequences. When an attacker compromised a Bitcoin user’s account, liquidating half a million dollars’ worth of assets in a firesale, this conduct was not more gameplay but a real-world theft.[18] Bitcoin (BTC) began as a hacker-lead project to create an untraceable virtual currency that requires no central authority to keep up with auditing, or tracking, the money.[19] Due to the dollar to BTC ratio ($18 in 2011) and the anonymity which defines BTC, the opportunity for fraud was ripe. The user, who had amassed 25,000 BTC, simply woke up one morning to find his account wiped and that the stolen BTC had already been transferred into real world currency (via Mt. Gox).[20] Regardless of whether or not the BTC had been redeemed for cash, the anonymous user would have been unable to get the virtual currency back as BTC transactions are untraceable and irreversible.[21] Consequently, “technically-minded” criminals are seeing BTC as a safe alternative to traditional forms of robbery.[22] It’s tantamount to a bank vault with no live guards, no security cameras and no way to trace the cash.

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But what about when these two avenues of thinking cross? When traditional ideas of embezzlement occur with virtual currency that was stolen by a user of an MMO? This was precisely the case when the CEO of Eve Online was caught essentially red-handed embezzling online credits (about $5100) from game depositors in order to pay his real world medical bills.[23] Although this incident occurred in the context of an MMO it was not in the process of actual game play. Instead, the offender ran an in-game bank which took deposits for interstellar credits. Thus, one would think this conduct should be considered traditional embezzlement. Nevertheless, no prosecution or any attempts at prosecution were made. Instead the company fell back on the “game-play” theory, stating simply, “[y]ou are able to lose the things you have created. That’s what makes the world interesting.”[24]

What’s concerning is the prevalence with which these virtual currencies are permeating our society and the lack of redress options available to those who have been cheated in the virtual world. Even non-gamers rely on virtual currency in the form of airline miles, credit card points, etc.[25] Meaning that the possibilities are endless when hackers compromise companies like Microsoft, whose points can be redeemed for almost anything the heart desires. In the future, developers and smart business owners who intend to use virtual currency should be encouraged to make use of programs which prevent chargebacks, virtual asset theft, gold farming, code hacking and account takeovers, by identifying devices and shares their reputation including alerting businesses to real-time risk.[26]

 


[1] Police Investigate Habbo Hotel Virtual Furniture Theft, BBC News: Technology, June 1, 2010, available at http://www.bbc.co.uk/news/10207486.

[2] Id. The term “phishing” is a play on words, making use of the fact that the scammers go fishing for information by way of fake webpages and essentially just wait for a user to bite—giving up valuable account information.

[3] Earnest Cavalli, Police Refuse to Aide in Virtual Theft Case, WIRED, Feb. 4, 2008, available at http://www.wired.com/gamelife/2008/02/police-refuse-t/.

[4] Id.

[5] Roberto Carli, The Sword, the Thief and the EULA: a Virtual Property Crisis in Online Videogames, Massachusetts Institute of Technology (Dec. 1, 2007), available at http://groups.csail.mit.edu/mac/classes/6.805/student-papers/fall07-papers/games-property.pdf.

[6] Id. at 3.

[7] Id.

[8] Online Game Theft Earns Real-World Conviction, The Telegraph (Feb. 1, 2012), available at http://www.telegraph.co.uk/technology/video-games/9053870/Online-game-theft-earns-real-world-conviction.html.

[9] Id.

[10] Id.

[11] See Cavalli supra 3. If the real issue hinges on people’s definition of “monetary value,” then what explains the dichotomy between acceptance of imputing value to tangible goods based on scarcity and value and using that same schema to impute value to virtual goods? Rather it may be society’s hang ups with legitimizing virtual economies altogether despite their widespread popularity.

[12] See Carli supra note 5.”The ability to become a different person and explore a different world is the defining characteristic of role-playing games.”

[13] Id.

[14] Id.

[15] See World of Warcraft’s EULA: “All title, ownership rights and intellectual property rights in and to the Game and all copies thereof (including without limitation any titles, computer code, themes, objects, characters, character names, stories, dialog, catch phrases, locations, concepts, artwork, character inventories, structural or landscape designs, animations, sounds, musical compositions and recordings, audio-visual effects, storylines, character likenesses, methods of operation, moral rights, and any related documentation) are owned or licensed by Blizzard. The Game is protected by the copyright laws of the United States, international treaties and conventions, and other laws. The Game may contain materials licensed by third parties, and the licensors of those materials may enforce their rights in the event of any violation of this License Agreement.” Id.

[16] Id. A market-determined floating rate is one that is stable and easily quantifiable, which goes to the sound business nature rather than purely entertainment value.

[17] Computers participating in the project must solve complex math problems and in turn earn Bitcoins, limiting the amount of currency in the circulation to those earned by these computers. The number of coins rewards as a result halves every four years to reduce hyperinflation and will max out at 21,000,000. Bitcoin Virtual Currency Suffers $500,000 Theft, ITProPortal (June 15, 2011), available at http://www.itproportal.com/2011/06/15/bitcoin-virtual-currency-suffers-500000-theft/.

[18] Id.

[19] Id.

[20] Id.

[21] Timothy B. Lee, Hacker Steals $250K in Bitcoins from Onlice Exchange Floor, ArsTechnica (Sept. 4, 2012), available at  http://arstechnica.com/tech-policy/2012/09/hacker-steals-250k-in-bitcoins-from-online-exchange-bitfloor/.

[22] Id.

[23] Paul Smalera, Bank Theft Highlights Downside of Virtual Currencies, Business Insider (July 2, 2009), available at http://www.businessinsider.com/first-virtual-bank-fraud-ceo-steals-virtual-deposits-trades-for-real-cash-2009-7.

[24] Eyjolfur Gudmundsson, an economics adviser to CCP. Id.

[25] Robert Siciliano, Hackers Go After Points, Credits, and Virtual Currency, Infosec Island (April 25, 2011), available at http://infosecisland.com/blogview/13172-Hackers-Go-After-Points-Credits-and-Virtual-Currency.html.

[26] Id.

~ by hkruzyk on November 3, 2013.

9 Responses to “All’s Fair in Love and WoW: Virtual Theft May Elude Real Life Prosecution”

  1. Interesting idea, hkruzyk. I agree with the point you made in the last paragraph. I think the developers of games should implement technologies and procedures to safeguard their users from theft and other crimes relating to their in-world activities. This is a means of self-regulation. If a game has a reputation of being very susceptible to theft, users should eventually learn of this and steer clear of that game. Developers should not be allowed to quickly create games that are highly susceptible to crime, and then run to real-world police when their users are being victimized. I guess I just want to put some of the burden on the developers to police the activities that go on in their game because the reality is, there is an abundance of crime occurring in the real-world that frankly does have more sever effects on people than online theft. Although theft is theft, like you say, prosecuting theft of online swords and gaming property shouldn’t take priority over prosecution of physical crimes like abuse, neglect, assault etc. In a perfect world with much more funds for police, all cyber crimes would be vigorously prosecuted. I just don’t see those crimes being paid their due attention until some of our society’s more immediate needs are met.

    In the meantime, I think users should be given a fair warning and complete disclosure of what they’re getting into by playing online games: What is the developer doing to protect their time and financial investment in playing the game? If they are a victim of theft, will the real police help out? What are the developer’s procedures? If all users could know these things up-front about the games they play, they could make informed decisions and the ill-equiped developers would soon fade out, and the more high-quality ones would survive, hopefully.

    • I agree that the onus should be on the developers of these games to implement appropriate measures to protect their users from theft. I would imagine that the online gaming marketplace would require developers to implement security measures to ensure that users did not stop playing their game in favor of another game that did implement appropriate security measures.

      I also agree that we, as a society, probably shouldn’t divert law enforcement personnel to investigate the theft of someone’s MMO digital item. I believe there is a distinction between the theft of a painting or backpack, and someone’s online combat armor or lightsaber. In Star Wars the Old Republic, for example, EA could terminate my account, and keep all of my earned credits and acquired digital items. EA hasn’t technically stolen anything from me, but I’m still left without my credits and items. I wouldn’t have any legal recourse against EA — SWTOR’s Terms of Service makes this point perfectly clear. I believe the terms attached to digital items really makes it difficult to determine the extent of ownership a user has in any given digital item.

  2. This was a great post. I found the section on MMO player-on-player theft particularly interesting. The post highlighted the general trend that courts and law enforcement entities are wary to apply the concept of theft in the MMO context. I think, at least for now, that this is appropriate.

    It is true that we impute value to goods. That is the overriding theme of the field of economics. The post highlights painting or antiques as examples of this. This is a good example to use. Some of us may be willing to spend thousands of dollars on a painting. Others may not be willing to spend any money at all. Then there are some people that would actually take a monetary loss just to get rid of it. This represents a spectrum of a notion referred to as “willingness to pay”. One thing is for sure though; there is definitely some sort of market for paintings and antiques.

    Going into this subject blind, I was hesitant to say that there is a market (in which people are willing to pay) in the MMO context. I thought that primarily because it takes no initial monetary investment (unless if you had to pay for the game itself, but that is still different than having to pay for the specific good in question) to achieve certain goods in MMO’s (other than time and skill). But this notion was quickly deflated after reading that the “sword” netted a profit of almost $900. So clearly, there is some sort of market.

    But I think what distinguishes this sort of issue from, say the painting one, is that the market is seemingly small and hard to define. One eBay sale is not necessarily an indication of a broader trend. I am relatively sure that this type of thing happens in small doses all the time, even with tangible goods. For example, I am sure there is someone crazy enough to pay, say $100 for a used tissue. (One man’s trash is another man’s treasure). But would that mean that the law should accommodate that circumstance such that someone could seek that sort of redress for a “stolen” used tissue?

    Conversely, paintings are bought and sold all the time. There are auction events all over the world where cash is exchanged for this type of good. Perhaps one day, there will be similar markets for MMO “goods”, but I don’t think we are there yet.

    But the Dutch case raises a different issue. Assault charges were clearly warranted, and surely the attackers of the boy felt that the virtual goods had value-but did they have monetary value (i.e. was there even a small market where they could be sold? I think courts ought to be careful to assign monetary value when there has been no proof of a market for such a good. Surely the victim cared about his goods-they presumably were achievements that took a lot of time and effort to obtain-but I would argue that they had emotional value, and not necessarily monetary value. To me, this could become a slippery slope if criminal sanctions are handed out in such contexts where there is no demonstration of a tangible market for an intangible good.

  3. Really good post on a very interesting developing area of the law. I fully understand why many in law enforcement and in the legal field are hesitant to attempt to prosecute these cases. Before this class I would have laughed at the idea of considering the theft of virtual items a crime. (Oh someone store your “battle axe” get over it!) But after everything I have read and seen about the nature of the virtual word these items should be treated as having not just sentimental but actual monetary value. What I find interesting is that although we are are dealing with the virtual world a few these cases involved good old fashion assault and battery in order to effectuate the theft. I find the analogy to art to be very applicable to virtual items. Like art the monetary value of a virtual item is subject to views of a relatively small community of people. Whenever a see a story about some weird modern art piece selling for huge amounts of money I simply don’t get it. However, if that art work is stolen it is totally legitimate to tie the value of the theft to what that small group of art fans are willing to pay for it. Similarly, virtual items may have no value to me, just like a painting of a Campbell soup can, but that does not mean that object does not have real monetary value. Furthermore, there are countless things we all own that have predominantly “emotional” value that we would be outraged if someone stole. Here, is a perfect example, if you adopt a dog from the pound, and it is not pure breed, does it have any value? You essentially get the dog for free only having to pay for the cost to the county. No one is going to give you any money for the dog. The dog is a financial negative every month and does not financially contribute to your household. But if someone steals your dog you sure as heck call the police and demand some sort of criminal punishment.

  4. Very interesting and well written post. I think everyone agrees that real-world physical crimes should not be ignored in favor of the prosecution of virtual theft (and I don’t think there is any risk of that happening). But, I do think that the theft of virtual swords deserves prosecution. I dont see why if we have virtual bullying, virtual class, etc. then why is the theft of virtual goods such a stretch? I think it’s a bit naive to think this issue is extremely rare. I remember several years ago hearing about people that solely earned a living by just played World of Warcraft all day and selling their characters and items online. In South Korea, this market is so extensive that a law was passed last year that directly bans trading of virtual items. (http://www.gamebreaker.tv/mmorpg/south-korea-virtually-illegal/) For all very popular MMO’s, there a several exchanges where people can buy and sell game items.

    It usually takes an extra-ordinary set of facts with a sympathetic victim to see a shift in law. The Netherlands case looks like it might be one of those cases.

  5. So the OP (original poster) makes some good distinctions that are important in this context: there is theft among players in-game; there is theft committed in-game but assisted by real world acts (e.g. the Dutch case); and then there are the hybrids such as the EVE player who embezzled the money (which is permitted in-game) but then took it outside of the game and spent it on a real world costs, or the Second Life Ponzi scheme that netted the fake banker $10,000 in real US Dollars. These last two feel more like the theft we are familiar with.

    To date, Terms of Service between the developer and the player don’t seem to do justice in the latter case. Sure, the wrong doer’s account will be banned but how does that help make the victims of the wrong doing whole. The developer could refer to the police but they do not. I’m sure they think it would be a waste of time. And the police/prosecutors haven’t matured into a good understanding of the value of virtual goods yet. To me, it is a tad bit of a cop out for the developers to say that the risk is all on the player who suffers the loss. The developer ends up making money on both the victim and the wrong doer. Sleazy you may ask?

    I do think eventually courts will recognize the value of virtual goods more widely. We already see it in South Korea and China where gaming is an integral part of society and gold farming has conclusively proved that virtual goods do have real value. At one point two years ago China moved to regulate the trade of virtual gold because it was having a real concrete impact of Chinese markets! We are not there yet, but it will be interesting to see what the state of American law will be in five years with regard to this issue.

  6. I think an interesting point was made in the OP, which was that the context of the world in which the person is playing needs to be taken into account. Obviously, if you are playing in a world where people can come up to your body after you’ve been killed and rummage through your belongings, you can’t expect to have any recourse. But a world like Second Life, which mimics the real world in many aspects, might require more protection as users might expect their virtual experiences to mimic their real world experiences. It is unfortunate that these virtual crimes are not being taken seriously, but I have a feeling it is going to take a long time for anything to change whether it’s due to budget restrictions or simple lack of understanding. This past summer, someone broke into my online bank account, and changed my passwords and my mailing address. The police told me that even though I had the address of the person that broke into my accounts, “nothing could be done” because “no crime had been committed.” And this was a more traditional form of virtual crime than what we are talking about here.

  7. This is a very fascinating topic that I do believe will undoubtedly become more relevant, if complex, in our slowly increasing virtually-literate jurisprudence. The point of real world goods having value primarily because we impute value onto them is a fundamental one which should naturally lead to the view that virtual goods should also have a value. A painting of a soup can made of canvas and acrylic or a virtual painting of a soup can made of zeroes and ones are both essentially worthless to me but there is real time, effort, and perhaps even some modicum of ‘creativity’ put into both to produce and accordingly infuse it with some manner of “value”. I do not think this is too far-fetched for most people to comprehend or acknowledge conceptually but the primary concern of potentially diverting already scarce resources away from policing real world problems serves as enough of a prong to hang out hat on that many do not wish to tackle it head on. The other major aspect being that our American society is simply not on the level of the other Asian nations where virtual worlds have been deemed not only mainstream but, to some degree, respected. Once either of these issues reaches a tipping point, that is, if enforcement resources somehow become significantly more abundant/well-managed, or our society becomes significantly more virtually integrated then we will see a sea change in how these virtual thefts and other crimes are view in the eyes of the masses and of those in Congress and the judiciary. Until that point, developers would serve themselves better if they were to be more clear and consistent in the fashion that they treat the property and currency of their users in-world and users of these online games and services would do well themselves to stay wary of how much of their own resources they put online with the knowledge that our justice system has not yet caught up to the multifaceted matrix of cyberspace crime.

  8. It seems that law enforcement officials are always the last to catch on to the the latest and greatest. Although some virtual property may be acquired after hours of game play, some virtual property is purchased. For instance, there are many “stores” in Second Life. While items are purchased with Linden dollars, Linden dollars are purchased with actual money.
    Like most property, if it can be bought and sold, someone will figure out how to steal it.

    Many people still believe that property must be tangible to have value even though there are laws to protect other intangible property. The computer hacker who stole $12 million worth of poker chips from Zynga argued stealing from Zynga was different from stealing from the U.S. mint because notes from the mint would be tangible.

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