Announcement Legal Issue

just though i point out what i found but seems that after looking at legal information theres a few technaical issues that need to be stated. as they fall into unfair business pratices.

http://www.servicealberta.gov.ab.ca/1025.cfm

"Charging a price for goods or services that is more than 10 per cent – to a maximum of $100 – higher than the estimate given for those goods or services unless the consumer has specifically agreed to the increase (Example: A repair shop says it will cost $150 to fix an item, but the final bill is $400.) "

http://ec.europa.eu/consumers/cons_int/safe_shop/fair_bus_pract/ucp_en.pdf

cleaning up the previous post layout.

Much that I hate the price rises, that is not quite the same issue as the example you give.

The repair shop should deliver at the advertised price, and LL have always done that. The repair shop can then raise its prices any time and charge customers those prices. LL have done that.

So I don't think that particular legal issue is involved here. However, I do think the "bait and switch" issue is still worth pursuing.

The upfront cost that LL charges for Sims places LL at an advantage when it comes to renegotiating any contractural terms (such as an increase in monthly subscription) since the customer will be out of pocket if they reject the renegotiated contract.

Any legal case against LL would therefore turn on whether LL is making unfair use of that advantage in making such a large increase in the subscription fee.

Matthew

in this case it is about bad faith, and bait and switch.

if LL knew they were going to do this and continued to sell these, or worse, knew they would do this before they enacted the price decrease, then they were acting in bad faith (mala fides). Bait and switch is the marketing of a product or service with the knowledge that the offer cannot be sustained for a reasonable expectation of use, and once the consumer is locked in, forcing them to accept something else of lesser value or higher cost.

The excuse for the price change is the "abuse" of openspaces.

a) openspaces, while being abused in greater numbers, aren't being abused differently than before the original price change. The advertising of these openspaces implied abusive use, and they added prims and raised the avatar cap.

b) raising the cost of openspaces does nothing to address the abuse of openspaces, especially given they have the technical ability to adjust to the load now and limit avatar numbers, limit prim numbers, limit script use. Instead, they just raise the rent.

c) raising the cost of openspaces harms abusers the least, and those who use them appropriately the most. Those who use them appropriately are least likely to be earning a profit on them, and therefore will be less apt to pay the extra. Revoking the educational benefit is that much more excessive while not addressing actual use.

So, there's really no way to look at this price increase and not see it as being in bad faith. They have the ability to fix the problem, but they choose not to. They are making the situation caustic for NON-abusers, and retaining abusers who are apt to pay more. Obviously, this isn't about server use, this is about maximizing profit after the sale by changing what was offered.

This whole situation looks a lot like LL wanted an influx of cash to buy hardware, they invited a lot of people with incentives to buy that hardware for them with their setup fees, and now they want the hardware freed up to set it up again for other people. If that is the case, then there is no doubt that this action is across the line.

abuse wasnt the actual reason for the increase when jack held a meeting with estate owners he said for hardware and that the sims where being used as they where intended so abuse been thrown out. it can fall into the lnks i said in many factors as informaton been misleading to the average customer

Hi Vye,

Thank you for posting this. It's good to have some cool-headed but serious discussion of the legal side. Please keep at it.

If you want to be picky, Linden has written that sims were "overused" and this has the same effect as abuse of resources. They can be cunning about it and say: Hey, we never said you meant to be evil, but the results are malevolent and we still have to stop you.

That is a ridiculous distinction to focus upon, though. They are still using a logic that says the customers did something unreasonable with products they just recently upgraded, marketed for all sorts of uses, and profited from. They are saying we crossed a line and it's all our fault. It is insulting that they wind the term abuse into their language, whichever way you look at it.

If Linden wants to go overboard about intent versus reality, then two can play at that game. Whatever Linden now says it "intended" for open spaces, their practices quite logically worked to deceive the consumer and have created a situation where we cannot get fair use of what we paid for up front.

Linden's intent is not our problem. Their business actions have proven to be inconsistent and excessive. They are claiming to run a virtual economy and internet service, not a casino. (This is even more ridiculous, if you take into account the crackdown on gambling.) Their false advertising and unreasonable rewriting of prices every few months (first the full-prim islands, now the open spaces) is a legal problem.

As a Canadian consumer my legal rights for fair trade act are legal and legit even if company is outside of where i live. next time its probly wise to consult legal department to see if you can do price raise like that legally for some users and that all faqs are given so end users can make a proper choice.

If you feel strongly about these issues, please consider replying to the survey about funding for legal support on Save Our Openspaces.

http://www.saveouropenspaces.org/forums/index.php

I realize these are difficult economic times, but I think that is also a reason to invest in stability for our virtual world. There are businesses but more than that, there are places we put our time and hearts into. Linden mentions abuse, but it is not acceptable that our spaces are being abused this way. Linden is trying to overprice so many islands being used for so many different purposes. This is terrible customer service and it may destroy many wonderful projects and retreats that were designed only recently.

We can pay for things to continue this way, go away and reduce Linden's tier income but give back their servers to be rented out all over... Or, we could chip in a little to pay for legal help. There are thousands of us and it would cost less to begin than what Linden will charge with its awful 66% increase over the months. This could make a real long-term difference in how Linden and others conduct online business.

In all this, I've only seen that LL is going to raise prices and continue to go after "abusers".

So all the rentals and stores, even if they choose to pay the higher tier, will eventually be shut down. As far as i have seen so far, they are not going to raise the price and tell the owners to do what they want with the OS's.

Ive been reading alot of blogs this morning and I am apparently missing something with all this. Why pay them more, to end up being shut down in the long run. According to LL, you can not rent out the spaces for ppl to live on or have stores......

I happen to have 1 OS that i use half the prims on. I run a store on my OS. So even if i were to bend over and pay out my arse, I'm still technically an "abuser" and will be shut down. Complete *BS* but other than checking into legalities, what can we really do?

BTW...

I checked out the FTC website. The form was quite easy to fill out. Maybe a few more of us should check it out too!!!

That law has little to do with that situation. That has to do with work, such as commissions, and the difference between estimated and actual costs charged after the work is done.

Now, if LL, at the end of the month when charging you, said out of the blue "Looks like you used more resources this month, so we're going to charge you $100 instead of $70" for the _previous_ use, then it could possibly be considered this (though doubtlessly this would break tons of other laws as well.)

This also is not bait and switch. Bait and switch is this: http://en.wikipedia.org/wiki/Bait_and_switch

I am not a lawyer, but it doesn't seem to me like there is a legal issue here. I may be wrong. There's many things a company can do which are unethical, damaging to customer trust, and draconian that are perfectly legal.

If it was about "abuse" of openspaces:
a) Linden would have served notice to the "abusers' as they are easy to identify from the servers
b) Linden would not have given technical support to anyone using Open Spaces for other than water or forest
c) Linden would not have told new "owners" that it was acceptable to use these spaces for residential or light commercial.
In fact, it could be suggested that selling Open Spaces to new owners in the last few weeks was a fraudulent act. One worth investigating for sure.

I have instructed a lawyer in California who is excited by what he has seen here in the last week. Linden just opened themselves a huge great big pot of badness.

Er when?? and why was I not invited?

Aminom Marvin: wikipedia, seriously? *rolls eyes*

some of us arent average customers where not blind to what we see but those that are dont understand why and all the information. the purpose for what i post in my first post is to show the consumer end of stuff a we are consumers.

to clarify one other thing zee linden did this in past also and hence why it caused an up roar. its the same mistake that happened in the past so this is where my logic comes in from past experance.

Are you saying the wikipedia page does not contain an accurate description of "bait and switch"?

Yes.

From the Federal Trade Commission:

"Sec. 238.4 Switch after sale.

No practice should be pursued by an advertiser, in the event of sale of the advertised product, of "unselling" with the intent and purpose of selling other merchandise in its stead. Among acts or practices which will be considered in determining if the initial sale was in good faith, and not a stratagem to sell other merchandise, are:

(a) Accepting a deposit for the advertised product, then switching the purchaser to a higher-priced product,

(b) Failure to make delivery of the advertised product within a reasonable time or to make a refund,

(c) Disparagement by acts or words of the advertised product, or the disparagement of the guarantee, credit terms, availability of service, repairs, or in any other respect, in connection with it,

(d) The delivery of the advertised product which is defective, unusable or impractical for the purpose represented or implied in the advertisement. [Guide 4]

Note: Sales of advertised merchandise. Sales of the advertised merchandise do not preclude the existence of a bait and switch scheme. It has been determined that, on occasions, this is a mere incidental byproduct of the fundamental plan and is intended to provide an aura of legitimacy to the overall operation."


You don't have to go to wikipedia.

http://www.ftc.gov/bcp/guides/baitads-gd.htm

Vye Graves: The exact link from the bottom of the wikipedia article, seriously? *rolls eyes*

Also, which of those items a through d are you claiming LL has violated here? It's clearly none.

depends on the country you live in theres different violations so it applys to your country your in

Clearly? Hrm, everyone i know sees the exact opposite as you. The lawyer I spoke with today saw the exact opposite as you.

in my, and many people's opinion...

*LL sold a service they couldn't sustain for a reasonable expectation of use, as it was being used at the time of the original change by the majority of users of openspaces.

* They continued selling it after it became apparent they couldn't sustain it, as evidenced by their blog post a while back, and continued to sell them right up until this announcement.

*They took no steps to limit abuse even when they had the power to. They have the power to limit script, lower the cap on avatars, cut prims. Instead they raise the rent and remove the educational benefit.

*They offered an INCREASE in resources as incentive to purchase. No where do I remember seeing in the original push the level of stoicism with which openspace use is described now. That all came later after they made millions on openspace sales. The doubling of prims can only be perceived as a suggestion of non-openwater use.

*They are now raising prices and quite possibly limiting the use that was available on the service at the time of sale, after the receipt of a non-refundable deposit. Abandoned hardware, purchased with those deposits will be retasked and "set up" for other ventures, quite conveniently.

I have no doubt you won't see it, and you will never agree. Thankfully, the vast majority of people don't agree with you. The situation very clearly meets the standard described above. The fact that you refuse to see it means there's no point in trying to reason with you. You can't reason out what wasn't reasoned in.

You have a good day.

you really don't have to go past (a). I know someone who bought an openspace two weeks before this change was announced. Now, they are being switched to a higher priced service with what will most likely be less ability to use before it is over.

Seems pretty plain to me. (a), (c), and (d) are all valid, though. We are now told that we cannot use openspaces as they were used at the time of the original push. We are told that LL can't possibly keep up with the strain of the product they sold. Our service is being redefined after the receipt of our non-refundable deposit.

Still not clear to you?

If the initial payments of $250 are considered to be deposits... Linden is obviously increasing the prices for the same line of products. All that remains is for a court to decide that this happened before we could get fair use from the open spaces.

I don't know about everyone else, but this isn't my day job and I still haven't quite finished my gardens in a few months of work. Maybe I'm just picky. After a few months of buying objects and carefully positioning prims, it was just starting to feel like an equipped home. The timing is horrible as far as I'm concerned.

I think this would apply for people who have purchased open spaces recently. They will obviously not be receiving a sim at the previously advertised monthly rate, and I'm not sure they can all get refunds. Again, there may be arguments about what is a "reasonable time." (Is Linden posting any tier increase warning in the Land Store or wherever they are still being sold?)

They say they will not take care of the online resources they sold us, for the rates we agreed to. Maybe an expert would place this under (d), I'm not sure.

By saying they did not anticipate and cannot maintain how the sims are being used, Linden contradicts its original claims to sell open spaces for residential or forest use, etc. (all of the things suggested in the original marketing).