Web Gaming Dispute Grows

The risk would be far greater than that. If LL had allowed the people who used this exploit to keep their sims, it would have outraged many legitimate businesses and triggered a hacking free-for-all on the Land Store and other parts of the game. Effectively, people who had paid for their sims would be subsidising these people to have theirs - people who might be in competition with them in-world - and would know that the people involved had "earned" this by walking a fine line with regard to functionality.

Now, I can just about believe that some land market players might fly around sims and type the region IDs directly into the auction house URL to see how the auctions are going, with no malicious intent. However, it could strongly be argued that "a reasonable person" a) would know that this means of access was not 'official', and b) would not have believed LL would have sold a sim starting at US$1.

There is strong legal precedent that sales made wrongly by webstores as a result of errors or technical faults do not have to be honoured.

The question of course is what form "land" takes.. is it, like L$, a "license"? And if so, what is the text of that license?

I think that reverts to a debate on the auction process.

Is it a contract akin to share purchase - in which case in real life Linden would have to normally bear the loss. See the real life example of the Japan Trader a few months ago

Is it an offer binding in honour only within a type of game - in which case Linden make the rules

Was the auction action itself either a "hack" or a Linden error, within a game or a platform - again if it is a game Linden makes the rules, if it is a platform the courts could decide due process happens?

Finally did second time land purchasers buy in good faith or were they aware of the position - again if it is a game Linden decide, if it is a platform then due legal process applies.

That was a human error, not a system error, and the buyers did not use any unsupported method of making a purchase.

I believe that a contract can't be signed by a computer.

Yet another reminder why SL is a game.

I think this should be settled out of court. With a baseball bat.

Lewis

If you hold my coat, I'll wield the bat.

The courts have long held that sales contracts that are clearly in error (e.g. buying a new car for $9.95) are facially invalid. Whether it was a hack or not, this guy has no case and the response will be "this guy has no case" and the court will likely say "yep, summary dismissal".

Rather expensive frivoulous filiing for the plaintiff which should cost LL counsel about 0.25 hours to end it.

As long as I can swing a few once he stops twitching.

Lewis

Maybe LL should charge HIM the proper price of $1,000 each, then sell them for $1 each to other players in a lottery - and give him the $1 they get (minus their handling fee).

Lewis

Its amazing how many people take one persons POV on these forums as gospel.

Does it even occur to them that they may not be getting all of the facts of the incident?

No one expecting sympathy, would report the negative details of their story.

LL staffers could use a course in people skills! Ive been treated rudely just trying to settle my bill! LL is for LL and investors, Not players , go figure.

No guess necessary, this is all part of the electronic record. Which means that, if Linden Labs is entitled to take the money, they should be able to document it with no problems.

But in the United States, if you take a corporation to court, it is the courts who decide who owes what to whom. The corporation does not decide that.

That made me laugh

I have had some first hand experience with this system hiccup in the land sale process. It was not this specific bug but a somewhat similar one, which ended up with me winning an 'unlisted' auction for $1 (not on a whole sim, just on a single tiny parcel).

This was about 8-9 months ago. I immediately IM'ed a liason, and said hey wait a minute this auction closed without ever being brought up live, and something seriously went wrong. They thanked me and told me they could contact support about it. It turns out there was a glitch in listing that specific auction, and they asked me if it was ok to re-seed it into the system, and I was more than happy to say yes, please, I want that land. (and I'm not so greedy/stupid as to assume i was 'entitled' to keep it without it being bought fairly, at public auction).

Long story short the land did go for public auction again, I did win it, but it cost me abit more than the $1, and i got to keep it, and my SL account, with nary a warning/suspension/ban to be seen. Why? because it was not my intend to *DEFRAUD* LL from money, nor to profiteer from a bug that came up.

In light of my own personal experience here, and that of these other people the only logical explanation that i can come up with is that the actions of these people *AFTER* 'winning' the auctions, were sufficient to make LL believe that it was their intent to defraud/profit from the new auction bug, and as such LL is fully entitled to suspend /delete all of their accounts, at least until a final determination of intent can be determined.

As to what these geniuses who thought they could blatantly rip off LL and then walk away with the profits are entitled to... Does use of a computer or network to knowingly defraud/exploit constitute a federal crime? why actually..... yes... yes it does.

http://www.usdoj.gov/criminal/cybercrime/1030NEW.htm

Excellent post.

I think that that's why LL recently redefined the Linden as some sort of licence, and not as actual money. I think that so far, LL has been running this as a game without looking at legal precedents in the wider world that's potentially likely to apply to a lot of the stuff that they're doing. It's a particularly geek point of view and one that I actually see a fair amount of on-line in general.

However, they've been plugging it as a platform, and as a business opertunity, and were recently on the cover of Business Week, and this lawsuit is, I think, a wake-up call to them that they now *do* need to consider outside legal issues.

Actualy rights and wrongs of the issue aside, setting up a land auction where the restrictions could be gotten around simply by typing in a different URL in was *incredibly* careless. Personally, I don't think that this case is as open and shut as some people think that it is.

Personally I think that the case is likely to hinge on wether or not fradulent intent on the part of the buyer can be shown. In the case where the buyer e-mailed and asked about the potential flaw, LL may have more trouble making an assertion of fradulent intent stick. The person asked about it, and there is a case to be made that LL failed to be diligent in taking action once they knew about the flaw, and instead wished the person "Good Luck" with the auction.

I don't know exactly how that exchange went, but this *was* a mistake on LL's side, how a court is going to decide on it is still up in the air, and *is* the sort of thing that LL is going to have to be a *lot* more careful about in the future.

As to locking the account of the guy in question, I'd say that this is potentially dubious as well, and again, I think that it's a case of LL not looking at the legal situation when making this determination.

I think that at this point, LL *has* called in the lawyers, and I suspect that a lot of procedures and policies are finally coming under scrutiny as to their legal ramifications. Which is a good thing in my mind, and even if it costs LL something now, I think that it will help quite a bit in the long run, both for them protecting themselves, and for people who are trying to do business within SL.

But are these terms taken from the most recent, revised TOS, or were they taken from the TOS that was in effect when the disputed auctions took place? And are those different?

Yeah, but there were recent cases where people bought items advertised on an internet site at a given price, and had their credit cards charged for the item at that price, only to come along and say, "Oh, we didn't mean to sell that item for that price, it was a typo. You're not getting the item we already accepted your money for." It was taken to court as a class action suit, and the retailer lost.

This is why most sites now have a disclaimer saying that they're not responsible for prices that are incorrect due to a typo or printing error.

Again, not saying that the person suing is in the right. I'm just saying that the case is not nearly as clear cut in LL's favor as a lot of people would like to believe.

"I was accused of being a hacker. I was accused of exploiting their system,
when all I did was follow their rules. Then they want to
turn around and SCREW ME," Spencer said. Linden's rules call
for a 5-day investigation into incidents like these, he said.
But it's been 11 days with no word from the company, Spencer
said.

About $1,800 is trapped in an account he can't get into,
said Spencer, a Fla. minister:

MINISTER????

He's giving us Floridians a bad name!

Even though we are the NCAA NATIONAL CHAMPIONS!!

If it was a reasonable sized plot, maybe the buyer misread it and thought that they were getting a real bargin.

The thing is, that if LL is a platform, and a place to make money, the way that they claim that it is, the this is the sort of situation that they should *absolutely* stay out of. The mechanism for buying and selling land is very clear and straight forward. If the mechanism in LL's opinion isn't good enough to ensure a non-fraudulent land sale at higher prices, (Which seems to be the assertion since they undid the sale.) then they should change it.

But making case by case determinations where *this* sale was "fair", and *that* sale was not...that's *not* going to work if SL is supposed to be a business platform.

That depends. Due to the nature of the 'way' these earnings were made, there may be a valid case of the people perpetuating these lawsuits as actually guilty of a federal computer crime. (i.e. hacking/defrauding for personal gain). The auctions they 'won' were never *EVER* actually opened by LL, they used post-data tricks to enter bids, outside of the public system, something that has, as a hacking method, actually landed federal computer crime court cases before.

Even if the lawsuits go in LL's favor the over all outcome may not. This may wake up a lot of people that enforce monetary laws. You know such as the IRS. With millions of real US dollar passing through this site a year how many of you paid taxes on any of the profit you made from your business that you turned into USD? How many of you have a registered business license to sell products you sell? How about a proper gaming license for the gambling and such? Lots and lots of small things that can bit LL in the ass and even it's players. If the IRS wishes they can audit anyone in SL if they find you made a bunch of money and didn't pay taxes on it... Or if you own a casino you may have other legal issues. http://www.kyroslaw.com/articles/online_gambling_law.html

Also note I believe LL makes it clear that you are responsible for your actions on SL. SO if you get busted for not paying taxes or whatever LL will not be held responsible for any of it.

These legal issues plus about a dozen other things are why I dumped my club and sold off my land and will not "cash out" any $L I get from stipends or otherwise.

Jodina you make good point. I do have business license, both state and city and I pay federal income taxe for my business, as well as, a host of other crazy taxes that my local government divies out like fresh fruit.

But you bring up a point that has not occurred to me and changes my context of thought. When I came to SL it was as an interactive and interface creative thinking that SL would be a great place to meet collegues and demonstrate skills, the social connection is just gravy. But now I see the very real chance that SL itself might generate income.

Here's the big but, the other shoe that is about to fall...I can just see the look on my CPA's face when I tell her (if I am lucky ehough too) make money out of here, who gets a piece of it and when? Does my state, county or city have a piece of it? Just like incorporating in another state or buying without sales tax, where is the place?

The other issue is income taxes, state or federal, when did I make the money? When I got the Lindens or when I converted to US?

Crazy stuff this virtual world...

For those interested in related articles:
http://www.theregister.co.uk/2006/04/28/breach_suspect_prosecuted/

This is a good example of how things go for breaches like this one. Even people who search for them with no intention to profit from them are being prosecuted. So what do you think will happen to people who abuse them for profit?

It sounds as though the price you were selling at was so inflated that it would be reasonable for someone to make this kind of error. I must say, my heart definitely doesn't bleed for you.