[New Gacha Policy Discussion]

7 hours ago, Natasha Petrichor said:

You're not wrong that laws governing internet communications/transactions are not self-enforcing.  But, that's a highly simplistic view that does not reflect the reality of doing business on the internet. 

For example, I work for a company that is based/incorporated in the US, and hosted in the US (on AWS, in fact), like Linden Labs.  However, like Second Life, we have a *lot* of users and do a *lot* of business in other countries, enough to be legally considered a non-resident business entity in those countries.  Which means we can be held legally and criminally liable under their laws; as long as the prosecution can establish that the company is conducting business in the country, being based somewhere else doesn't really matter, and thanks to the international nature of the internet (and precedents set by the RIAA and MPAA, unfortunately), establishing that an internet service can be sued/prosecuted in another country's courts is trivially easy. 

I imagine you knew that much (just making sure we're on the same page), but here's the part I think you're missing:  In the world of corporate law, if there is already a case against you, it's too late, you've already lost.  The potential fines are so high that most companies cannot survive paying them, or even an out-of-court settlement, and the legal fees to fight a case can be equally devastating.  Some companies, as you pointed out, will fight to make a point, but they are the exception, and tend to be the ones with unfathomable millions to spend.  SL is bigger than most people give it credit for, but it's not THAT big. 

So, when there are new international regulations that apply to a company like Linden Labs, the question is never "are we literally being charged with a crime or threatened with a lawsuit right this second?".  If that question is being asked, it means the company's lawyers failed so spectacularly that they'll probably be fired after asking it, because corporate law is about calculating and mitigating risk.  The primary job of corporate lawyers is to anticipate legal cases *before* they happen, and give advice on how to prevent them from happening.  Thus, the real question when evaluating new regulations is "how much liability could we face under this law if we don't comply, what is the cost of compliance, and how much will it cost to just not do business in that country?". 

Coming back to the issue at hand:  It's reasonable to assume that the regulation of lootboxes as a gambling mechanic is the most likely reason for this policy change for LL, because while that's probably not on the immediate horizon in the US, many EU countries (like Germany) have already passed laws imposing various restrictions on lootboxes in video games, and more are in the works.  Thanks to companies like EA and Activision doing everything they can to fight those laws (because unlike LL, they have the resources to afford the risk, and a more obvious fiscal incentive to do so), the lootbox situation in the EU is escalating, and more countries are exploring even stronger restrictions.  And to any reasonable observer, there is no distinction between the mechanics of a loot box in a video game and the mechanics of a gacha machine in an SL store:  Pay real-world money for virtual currency, then use that virtual currency to buy a loot box for a set amount, which awards a random prize that may or may not be what the player wanted, with the most desirable prizes having extremely slim odds of being unlocked, encouraging players to buy more and more loot boxes to try to get what they want.  You can argue whether those mechanics constitute "gambling" (which is, at time of writing, an unsettled question in most courts worldwide), but trying to argue that the gacha machines in SL stores work differently in a legally-distinct way is not an argument anyone will ever be able to win in court.  Even the late Johnny Cochrane wouldn't have been able to pull that one off, and I could not think of a legally-significant difference to use in a rhetorical comparison when writing this paragraph.

So that's the legal landscape most likely influencing this decision - it's possible that it's something else, or somewhere else, but given that this unfolding situation has been dominating gaming media for over a year, it's as good a starting point as any.  Because even if the underlying motivations are completely different, the same questions would need to be answered:

1. How likely is it that this will turn into a real liability, and when is that likely to happen? 
2. If it does, how exposed is the company, and what would the potential damages and legal costs look like? 
3. How much would compliance cost the company? 
4. How much business would the company lose if they took door #3 and ceased doing business in the affected country/countries?

Those are the questions that would've needed answering in making this decision, and based on what's been happening thus far, we can extrapolate that the answers were, respectively, "very likely to be a real liability, and very soon", "so extremely exposed that the damages could pose an existential threat to Linden Labs", "total cost of compliance via a policy change is the lesser of three evils", and "we cannot afford to cease doing business in every country where this risk exists".  We can debate/question whether those were the "correct" answers, but the legal calculus behind answering those questions (or even just the first one) is so much more complex than "did LL receive a legal threat from a prosecutor about this?" that the existence of such a legal threat isn't really even relevant.  Because, as I said, if such a legal threat existed, it's already too late, the lawyers have already failed to do their job of anticipating a threat before it happens.

And that's just the legal calculus, which isn't the whole story.  This is also a marketing and public relations issue.

As I mentioned, the legal situation regarding lootboxes and other gambling-adjacent video game mechanics in Europe is a relevant legal situation that applies to SL gacha machines as much as it applies to video game lootboxes, and it seems like the most probable legal motivation behind this policy change.  But the legal battle over lootboxes did not arise spontaneously, it was the result of massive mainstream press coverage about these mechanics preying on children, causing them to lose thousands of dollars, bankrupting their families before their parents even realized what was going on.  It's not the only negative impact of these sorts of game mechanics, nor is it necessarily the most severe way in which these mechanics damage people's lives, but it's the most sensational and motivating impact.  And it got a LOT of attention, to the point that almost everyone (especially in Europe) has at least seen the shocking headlines of kids spending tens of thousands of dollars gambling on FIFA. 

So, from a PR standpoint, on one side of this battle you have distraught parents in financial ruin because their kids just wanted to see their favorite football player in a video game and didn't understand the concept of what they were doing or how the game worked.  And on the other side of the battle, you have some of the biggest and wealthiest entertainment companies in the world, who have also been making unflattering headlines for unrelated reasons, making clumsy, obtuse statements about obscure legal technicalities while blaming those same parents for not understanding something they never explained clearly.  Even if the legal arguments are completely removed from the equation, it doesn't take a PR expert to figure out which side of that battle has the winning optics in the eyes of the general public (whether you *agree* with those optics is irrelevant, because PR is about understanding the perceptions of an outside audience, and figuring out how to make your case in the court of public opinion).  Which is why a lot of video game studios that aren't owned by EA or Activision have been making a public, performative point to remove lootboxes from their games; even if they're not facing immediate legal liabilities, they probably had corporate lawyers arriving at the same conclusions described above, combined with PR experts saying "even if you could win this case in a court of law, no one can win this case in the court of public opinion", and decided that it was cheaper and easier to just stop. 

There are more factors in a decision like this - community management, revenue analysis, etc - but as someone who's spent every day of the last six months with a front-row seat to a nearly identical (but unrelated) situation, that my analysis of what's happening here.  Did LL's lawyers and PR advisors miscalculate?  I don't know, and that's a reasonable and specific question to ask.  But I doubt the official on-the-record details eventually released will ever be as meticulous and detailed as you seem to want, because that's not how PR works.  What I *do* know is that it's not helpful to base assumptions and extrapolations on a narrow view of what does and does not constitute a valid legal threat, because the cardinal rule of corporate law is to never, EVER underestimate the potential risk of a rapidly-evolving legal landscape.  Because unless your company operates with a budget in the same order of magnitude as Amazon, it is ALWAYS cheaper to be cautious than cavalier, especially when analyzing and anticipating laws that are actively being written and debated. 

Thank you thank you for saying what I was trying to. The possibility of prosecution affects behavior—and very reasonably so. The existence of laws in any jurisdiction—especially in a growing number of jurisdictions—that prohibit gacha-like game mechanics are going to make SL think twice about potential liabilities of continuing to allow them.

[New Gacha Policy Discussion]

Just now, Prokofy Neva said:

Can you point to actual jurisprudence, i.e. case histories, citations of decisions in a court of law which is what makes up law in the US in the common law system.

I'll wait, I figure I have a year or more to keep selling gatchas on the MP before I run out.

2 minutes ago, Prokofy Neva said:

I'll wait while you go find the citations of ANY country, Canada, Japan, Belgian, or state like California, that presumably has laws or statutes that have been used to prosecute merchants in SL. 

I'll wait a year, while I re-sell my gatchas on the MP.

 

That's not what I said. Don't put words in my mouth.

You keep referring to a law in Canada that no one linked to or discussed. What WAS linked to and discussed was a PDF referencing laws against illegal gambling devices in California. You keep saying there isn't any US law on this. That is not true. There is a law on the books in the state where LL operates.

That is all I asked for you to acknowledge. Please stop perpetuating the same inaccuracy. Thank you in advance.

---

As for your question: is there a case history of that law being used to prosecute anything like SL? ***** if I know. I am not a lawyer. I do not pretend to be one.

However, I will simply point out that the existence of a law, regardless of its enforcement, matters. This is why, for example, Lawrence v. Texas in 2003, rendering all sodomy laws in the US obsolete, was important. It wasn't that people were going to jail for their sex lives with any regularity. It was that, at any moment, in theory, they could.

Am I saying that gacha are on the same level of basic human rights? No. I am not. I am simply using a well-known case to demonstrate that it's still important to take theoretical prosecution into account.

LL doesn't have to wait to be prosecuted, or wait for a similar case to be prosecuted, before noting that they are technically in violation of CA law, are thus potentially in danger of prosecution if anyone felt like doing so, and putting a stop to the illegal behavior.

[New Gacha Policy Discussion]

1 hour ago, Prokofy Neva said:

Russia does things like that, not EU states.

Ummmmmmm have you seen the stuff that Hungary has been up to? Central European University was forced out of Budapest due to crackdowns on speech. Poland: also passing some really problematic laws. Still members of the EU 🤔

[New Gacha Policy Discussion]

1 hour ago, Prokofy Neva said:

Collecting VAT is something they do as merchants, as a business.

They are not prosecutors, however, with international standing, and cannot prosecute another country's laws on their behalf.

What they can do is make a policy about anything they like, for any reason or no reason, as a private company. So they have. Most likely because Elizabeth Warren's protégé among the new owners of LL cast his eye on this, for a variety of political and cultural reasons.

Many people have ideas about how laws are executed internationally that are utterly ignorant of how such things work. Laws are not electronic machines that self-execute. You need a prosecutor, a judge, a court with standing, etc.

Example: as we see Canada passed an anti-gatcha law in *2010*. Canadians went on pulling levers in SL for 11 years afterward. Nothing changed in Canada. There isn't some judge eyeing SL as far as we know. Possibly Japanese regulators did? But I'm willing to bet there was no actual RL prosecutor contacting SL, it was just produce on their part. They have not cited their legal thinking on this, merely alluding vaguely to a "regulatory climate" which in fact does not yet exist in the SL, absent a law *and its application*. Remember, the US is common law, i.e. law is interpreted by a judge and past rulings form the basis for future prosecution.

www.ca.gov is the URL for the government of the state of California. I'm not saying you're wrong about international law (first of all, I am not a lawyer; second, to the extent I know anything about law, you're right).

But please stop being disingenuous about the existence of an actual law in California because you haven't checked the URL or the PDF that was linked.

[Not even "stop avatar animations" is helping me stop dancing. HELP.]

So I had the owners of the poles restart them, and I was fine for a bit... then it started happening AGAIN.

 

I am at my wit's end.

[Not even "stop avatar animations" is helping me stop dancing. HELP.]

The dancing seems to happen no matter where I am..

[Not even "stop avatar animations" is helping me stop dancing. HELP.]

Yes, I logged into my home location, which is in a different sim to the pole in question. I haven't tried the chat commands though.

[Not even "stop avatar animations" is helping me stop dancing. HELP.]

Thanks! I checked my worn items, there's nothing suspicious. I even tried doing a character test to see if that would fix it. (Then Ruth started dancing.)

[Not even "stop avatar animations" is helping me stop dancing. HELP.]

I hopped on a pole and started dancing. Logged out while dancing on the pole. Logged back in later, was still dancing. OK. Not unusual. Choosing stop avatar animations from the menu didn't help; the animation would stop for a bit, then start right back up again. I went back to the pole, sat on it again, hopped off. Fixed... or so I thought until I logged off and logged back in again. I was dancing again! And no amount of "stop avatar animations" will help! There has to be another fix other than going back to the same dance pole and sitting on it every time I log in. This is bizarre, and I've never seen anything like it!