Digital life - what is all the fuss about?

Virtual worlds could be the future of the internet.
Learn more
  • Updated:13 Sep 2007

02.Legal issues and dangers

Virtual carFor all their benefits, virtual worlds also raise serious legal and social questions. As they get more complex they also become prone to the same problems found in the real world, such as crime, copyright breaches, financial disputes, privacy and security.

But the law is yet to test many of these issues.

“With virtual worlds, there’s a need to create an entire body of law with a serious system of enforceability to protect members,” says David Vaile, director of the Cyberspace Law and Policy Centre at the University of New South Wales.

“It’s a bit like the early days of the internet, where so many things had to be sorted out. There’s potential for great opportunities — and exploitation.”

End User Licence Agreements

Most online services have an end user licence agreement (EULA) that sets the parameters for interaction within the virtual world platform. However, EULAs may not be able to adequately cover the myriad of issues that could arise with complex behavioural, financial and social interactions between avatars.

David Vaile says that EULAs offer some help, but many questions remain unanswered.

“The EULA purports to be the basis of all relationships and procedures within the platform. It looks like a legal system in a box, but will it expand to cover more and more interests? It’s a huge task to replicate the legal system.

“As disputes emerge, could the EULA say where disputes are to be dealt with? Or is a dispute resolved according to where the player resides, where the money originates or by local law? And what about the issues not covered by the EULA contract? They may not be tied down to one country and you may find yourself subject to foreign law.”

There are specific areas of law that may or may not be enforceable in the virtual world. Customary law, for example, could create conflicts of interest between users about cultural objects. Do traditional owners have a say over how their sacred sites, such as Uluru, are treated in the virtual world or does the creator of the platform have the final say?

Threats and dangers

Virtual monsterAs with any online activity, there are risks and dangers posed by getting involved in virtual worlds. Privacy, viruses, financial security, identity fraud and suitability for children are just some of the areas of concern.

In real life, you have a right to a certain degree of privacy and have safeguards in relation to the collection, use and disclosure of personal information. The National Privacy Principles cover the rights that each person can expect and the obligations of organisations and others to respect those rights.

However, virtual world owners have access to vast amounts of private information about members. Users need to know that their personal details are protected and they can trust the company’s security procedures.

  • Using avatars in a virtual world obscures the real identity of participants and that can make it hard to know who you’re communicating with.
  • As with all online transactions, you must use discretion if you choose to disclose personal information and you should never disclose credit or banking details.
  • There is also the risk of unknowingly downloading viruses and trojans that expose your computer to hacking attacks.

Some users have been infected by trojans and keyloggers (see Dictionary) when installing third-party software. “Only a small proportion is likely to be malicious, but it is important to only install software you trust,” says EFA’s Nic Suzor.

Financial risks

Monetary transactions frequently occur in virtual worlds between users and the world owner, and also between users themselves. Virtual transaction accounts help shield users from revealing personal account details when making transactions. However, transactions between players may not always be carried out using online accounts.

Nic Suzor says this is an area of risk to users. “Some virtual environments … have secondary markets where players can purchase items from other players … and players must be careful when giving their payment information to sellers when not conducted through officially sanctioned channels,” he says.

Legal experts see the clash of legal jurisdictions creating problems when trying to ascertain what laws apply to the activity or transaction and how or where it should be settled. Nick Abrahams, partner and national leader of Technology, Media & Telecommunications Group with Deacons Lawyers, sees some potentially serious legal issues.

“There are legal problems to do with the ability to generate money … the Australian Taxation Office says that there are GST implications of earning money in virtual worlds. Is there anything within the world to make resolutions between two avatars? There’s the issue of different laws around the world and how they relate to certain things. There have also been examples of groups of users manipulating the in-world economy for their own gain.”

Children's safety

There's a possibility for children to come across adult sites within virtual worlds. Some platforms have restrictions, but it doesn’t guarantee that children won’t be exposed to adult content and conduct. There’s really no way to be sure about the age and intentions of users in virtual worlds. And it may not be practical or feasible to monitor children at all times while they’re on the internet to stop them from coming across pornography or unsuitable material.

Like internet advertising aimed at kids, advertisers and marketers are quickly taking up a place in the virtual world to spruik products to kids and teenagers. Some junk food companies, for example, have created a shopfront within virtual world platforms to promote their brands and products.


Sign up to our free

Receive FREE email updates of our latest tests, consumer news and CHOICE marketing promotions.