eBay bans virtual property auctions?

Game asset auctions on eBay - soon to be history? According to an original article on Slashdot, a representative of eBay has confirmed that they are delisting auctions on “virtual artifacts”, said to include currency, virtual items, characters and accounts. Neopoints from Neopets are specifically mentioned, but I wonder if this applies to non-game virtual property such as ICQ numbers? From Slashdot:

Mr. Hani Durzy, speaking for eBay, explained that the decision to pull these items was due to the ‘legal complexities’ surrounding virtual property. “For the overall health of the marketplace” the company felt that the proper course of action, after considerable contemplation, was to ban the sale of these items outright. While he couldn’t give me a specific date when the delistings began, he estimated that they’ve been coming down for about a month or so.

This would not be the first time eBay bans RMT auctions. In 2001, it pulled down auctions over assets in EverQuest, a fantasy MMORPG operated by Sony Online Entertainment. The pull-down was in response to demands by SOE, with which eBay seemed reluctant to comply. What happened after the pull-down was that trading over EverQuest assets moved over to other marketplaces such as PlayerAuctions. Eventually, SOE opened its own RMT trading platform called Station Exchange, where players can securely trade assets that exist in designated EverQuest II servers.

This time though, it sounds like all RMT transactions would be banned. From Slashdot:

Mr. Durzy pointed out that in reality, the company is just now following through with a pre-existing policy, as opposed to creating a new one. The policy on digitally delivered goods states: “The seller must be the owner of the underlying intellectual property, or authorized to distribute it by the intellectual property owner.”

There are two points I’d like to raise. The first is that some virtual world operators allow player-to-player RMT, Ultima Online’s operator Electronic Arts being one. UO items are still being traded on eBay for hundreds of dollars (talk about vintage virtual property!) – will they be removed as well?

The second point concerns the legal side of the matter. Unspecified “intellectual property” subsisting in virtual property and owned by the operators is cited as grounds for the ban. Intellectual property rights that could apply in this case are copyright and trademark (and in the EU, database rights). I am not equipped to deal with the question of trademark (though I suspect it would not play a part), but I can speculate about copyright. For starters, I am not sure if copyright can subsist in virtual assets such as currency units. If it does, I think it would subsist in their graphical representation and not the database entry. Assuming copyright does subsist in a virtual asset, it grants the owner (assumed to be the operator here) certain exclusive rights over the assets, most importantly the right of publication and the right to produce copies. However, neither of these rights are infringed when control over a database entry is transferred from one user to another, regardless of whether payment is involved or not.

The vague references made by MMORPG operators to unspecified intellectual property rights are intended more as a deterrent, as is often the case with IP today. An actual cause of action would be breach of contract: players have agreed to keep away from secondary markets by accepting the EULA. But the thing is that eBay or any other marketplace is not party to the agreement, so I suspect they have no obligation to take down the auctions on their own initiative.

To avoid misunderstandings, I should point out that I fully support an operator’s right to ban RMT from its services should it wish to do so. I am just saying that its ability to enforce that decision through legal means may be limited. I am also sceptical as to how much it will achieve if the service is designed in a way that incentivises RMT.

In any case, if eBay carries through with banning game-related virtual property transactions, it is kind of historic, because eBay is the place where RMT first started in significant volumes. From a 1999 press release by Electronic Arts:

Electronic Arts, the world’s largest interactive entertainment software company, appears to be breaking new ground once again with its popular virtual world Ultima Online. In recent weeks, people have been flocking to one of the Internet’s best-known auction sites, eBay, to bid on Ultima Online (UO) accounts, being sold by UO players. Several of the accounts have traded at more than $2,000 and two accounts have sold for $3,000 each.

Rumour has it that IGE has been having it tough lately. Will eBay’s decision help trading companies flourish? In any case look to underdog auction sites like PlayerAuctions as the winners in this deal.

11 thoughts on “eBay bans virtual property auctions?

  1. In this case, I believe you are absolutely right regarding the quagmire that the intersection of intellectual property rights and content in virtual worlds. Drilling down to currency, and parsing the offense from the action is especially important. In this case, Intellectual Property rights are asserted where PHYSICAL property rights might be more appropriate–if at all.

    The trouble is that this reasoning is not going to help us. If a legal question was forced between a user and the court that rested upon the broad application of IP rights, a judge would hopefully find (assuming the right counsel was retained) that the language of IP law is being tortuously applied to ludicrous ends. But the court case would never revolve around these questions at any point where someone would have a grievance to bring before the court. Ebay is as free as a bird to restrict auctions of any sort, if they banned auctions of cars with a model year of 1966, they could do it. They change their terms of service, and users click through them to access the site. If, in their business dealings, they decide that they don’t wish to be caught in a RMT morass, it is well within their rights to decide that they don’t wish to allow those types of transactions to occur. The fact that they chose to post some rationale is incidental–they could have just changed their terms of service and been done with it.

    The same goes for games that chose to allow or ban RMT. They choose to claim that it is copyright infringement becuase most business majors and lawyers figure that joe Six-pack will be more scared of words like copyright infringement (Warnings regarding which he has presumably fast forwarded through for decades on his VCR until that most ultimate of industry coups, the DVD stopped that), than a statement along the lines of: “Because we said so”. But the statement may very well be just that. The EULA of those games allows the company to ban users for violations of the license and doesn’t require them to provide demonstrable proof. If a user chose to sue the company arguing that it was his/her right to sell in game merchandise, the company would combat it under the fact that the RMT was a violation of the license, NOT that it was copyright infringement.

    So, the only REAL hope to have the law clarified is to have someone sue a dummy MMO company, which bases its defense on the claim that property in game is copyrighted, and have that company lose SPECACTULARLY and continue to appeal until the ruling impacts everyone in the industry. As a matter of fact, i would love to do that, just to see the blood drain out of game industry exec’s faces.

    Here’s wishing…

  2. Second Life virtual goods are intended to be exchanged. Linden Research, maker of Second Life, says users own the copyright on material they produce. It’s common and totally above board for players to exchange their virtual goods for real currency.

    Are Second Life virtual goods going to be banned from eBay?

  3. Could you take the pains to put in the expansion of any abbrevation that you use on the page atleast once for your users..?
    Now, what the hell is RMT?

  4. Ebay could pretty easily ban SL goods without allowing recourse for the user base. According to their justification, SL goods should be able to be exchanged, but that doesn’t stop them from violating that justification or changing it arbitrarily.

    The good news is that SL goods don’t really NEED to be sold on ebay. The goods can be exchanged in game, then in game money cashed out for real money. This peculiarity is instructive, though, because it shows where the market goes if squeezed. Like the original poster mentioned, Sony already has their own ‘official’ RMT site, and other sites with no concerns about harassment from game companies have sprung up to fill the void. Even after Sony banned EQ auctions, players would auction proxies or use euphemisms or codes to describe products. In all these cases, business migrated away from ebay and set up shop on the margins.

  5. Well, after years of having ebay auctions for Ultima online items, and by not stretch was I making a killing, Ebay has delisted my item. The present list of UO related items dropped below 500, and is still falling.

    I think Ebay needs to consider the impact it will have on their business. While I am sure there were unlawful sellers, I am also sure there were quite a few legitimate sellers as well.

    For those people who made a legitimate living selling virtual items, why would they stay with Ebay. So it seems that Ebay did what UO would not, and that is to piss off an entire community of UO subscribers.

  6. Market places for UO goods are still around, all ebay has managed to do is make it really hard for the average joe blogs to sell his or her account and gold.

    The main sellers seem to still be there, a few have gone but sellers such as http://www.leogaming.com are still around going strongly. mighty fine graphics on the site, is one of the best looking virtual game sales sites i have seen.

  7. Ebay is internacional company, about virtual items especial world of warcraft in ebay.com most auctions was remove now check ebay.de

    I was one sellers was remove all my auctions.
    and ofcourse account ebay cancel .

  8. It drives me crazy how eBay did this. Theyve lost out on milliosn themselves just from doing this and cuased all us UO players a hell of a time trying to find some good auction sites. Ive been at it for 20minutes and havnt found a good UO Auction site yet :/

    There are ofcourse a lot of personal UO seller sites but most of which overcharge, and dont allow us to sell our own items. :/

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