Lab updates Terms of Service

LL logoUpdate, December 1st: Following my line to the Lab, the ToS was re-issued with Section 10.1 corrected to reference Section 11.5 instead of the incorrect Section 10.2, which had been removed with the original December 1st update. This article has been amended to reflect the update.

On Tuesday, December 1st, 2015, Linden Lab issued an updated Terms of Service (ToS) covering their Second Life and Blocksworld products – and for the first time, at least in recent updates, outline the specific changes which have occurred within the ToS, defining them as:

  • Removal of references to Desura (sold to Bad Juju Games in November 2014) and the Linden Dollar Authorised Reseller programme (discontinued as of August 2015)
  • Explicitly addressing the Lab’s intolerance of harassment of Linden Lab employees
  • Clarifying of the arbitration provision in accordance with applicable Californian law.

In addition, and in light of the formation of Tilia Inc., the Lab’s virtual currency subsidiary, the Terms of Service have been expressly expanded to define “the terms on which Linden Research, Inc. and its wholly owned subsidiaries (“Linden Lab”) offer you access to its interactive entertainment products and services.”

The alterations to reflect the fact the at the Linden Dollar Authorised Reseller programme is no more can seen in the massively foreshortened Section 4.7 of the revised Terms of Service, which once again make it clear that the only point of reference for the exchange of Linden Dollars for physical world currency may not occur anywhere outside of the LindeX, nor may Linden dollars be purchased other than via the LindeX.

The update to reflect the Lab’s intolerance of staff harassment can be found in a revision to Section 6.1. iv, to whit:

(iv) Post, display, or transmit Content (including any communication(s) with employees of Linden Lab) that is harmful, threatening or harassing, defamatory, libelous, false, inaccurate, misleading, or invades another person’s privacy; [my emphasis]

There has been speculation this relates to certain personal attacks directed towards Ebbe Altberg through the likes of Twitter. However, it would seem more likely (I would hope) that this section is intended to address similar attacks which have been made through the Lab’s own forums, etc., over which they have full jurisdiction.

Section 10 contains the changes to the arbitration process, with section 10.1 being greatly streamlined in content and focused directly on the requirements of the Commercial Arbitration Rules of the American Arbitration Association (“AAA”).

While I am not a lawyer – and so the following statement is purely speculative on my part – it would appear that included in these changes is an attempt to prevent class action suits from being bought against Linden Lab as a part of the arbitration process:

Should either you or Linden Lab elect to resolve the Dispute by way of binding arbitration, the arbitration shall proceed in accordance with the then-current Commercial Arbitration Rules of the American Arbitration Association (“AAA”), except that in no event shall the arbitration proceed as a class or representative action. [my emphasis]

One error with these latter updates is that they still reference section 10.2, which has in fact been removed from the ToS as a part of the updates; something that has been raised with the Lab. Section 10.1 now correctly references Section 11.5.

A further change, not mentioned at the head of the ToS can be found in Section 4.1, where the final paragraph has been revised to read:

You may not sell, transfer or assign your Account or its contractual rights, licenses and obligations, to any third-party (including, for the avoidance of doubt, permitting another individual to access your Account) without the prior written consent of Linden Lab.
[my emphasis]

This raises an interesting question around the subject of shared accounts – often used by groups where an account might be used by more than one person for administrative purposes, etc. While the sharing of account passwords has always been frowned upon, the revision to section 4.1 tends to suggest that these accounts could now be deemed as a violation of the ToS unless the Lab’s written consent is granted. I’ve written to the Lab on this point and am awaiting a reply.

Those hoping this update might see a further improvement to the wording in Section 2.3 relating to IP rights will be disappointed. The section is untouched and remains as much a mess of a word salad now as it did following the “clarification” of July 2014.

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Lab calls a halt to the direct exchange of Linden Dollars to other virtual currencies

On Friday, March 13th, Hypergrid Business relayed news that Linden Lab has called a halt to the use of Linden Dollars outside of their own platforms.  The news itself came from the OpenSim based Avination, which has for several years provided the means to exchange Linden Dollars to their own currency (C$) via the use of an in-world ATM mechanism.

In an announcement, which has also been distributed to their users via e-mail, Avination state:  “Due to recent interaction with Linden Labs, we regret having to inform you that the transfer of Linden Dollars to Avination is no longer available, including the payment of your Avination sims via the Avination ATMs.”

The announcement goes on to further read in part:

Following discussions with Linden Labs they have advised that any use of Linden Dollars in payment for currency of ANY other virtual world, or for external services which are not used in SecondLife [sic] is in violation of the TOS …

According to Linden Labs [sic], users of SecondLife [sic] must cash out through LindeX before using real currency to pay for services not rendered within SL.

This move is being linked to matters of potential liability for the Lab. In 2013, the company moved to put greater controls on the re-sale of Linden Dollars through third-party exchanges. At the time, there was a lot of speculation (including my own) as to whether this was in response to FinCEN recommendations or as a more general means of dealing with issues of fraud, etc.

In 2013 the Lab moved to provide greater control over the re-sale of Linden Dollars, including prohibiting third-party exchanges from either buying back L$ amounts from users or providing them with the means to cash-out L$

While the Lab did subsequently allow third-party operations to continue to sell Linden Dollars to users (said L$ having been purchased from the Lab), a prohibition was placed on such operations to either buy L$ amounts from users or cash them out of the platform; a move which allowed the Lab to demonstrate it can effectively monitor and control the outward flow of money from Second Life.

However, it might be said the the use of in-world scripted devices such as “ATMs”, which enable the direct conversion of Linden Dollar values to other virtual currencies which can then be cashed out, potentially gives rise to liability exposure for the Lab, should it be shown that such mechanisms might be used for illegal purposes. Thus, the Lab has made this move to distance itself from such a risk.

In their announcement, Avination also suggest that this move may affect how Second Life users can pay for external services such as audio stream rentals in the future. Whether this is the case or not remains to be seen. Most of these services provide such a payment mechanism through a registered Second Life account, without any supplemental transfer of the value of the payment outside of the platform (the funds can effectively only be cashed-out via the Lab’s LindeX). Thus, there wouldn’t appear to be any issues with services working in this way to continue to do so. However, this is purely speculation on my part, and we’ll have to await official word from the Lab.

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SLBA ToS and Skill Gaming presentation

ToS-SLBA-2On Saturday August 2nd, 2014, Agenda Faromet, an attorney specialising in privacy and Internet law operating out of San Francisco, and a member of the SL Bar Association, gave a dual presentation on the recent (July 2014) changes to Section 2.3 of Linden Lab’s Terms of Service and on the changes to the Lab’s policy on Skill Gaming in Second Life, which are due to come into effect from September 1st.

In all, the session ran to over an hour and a half, with Agenda initially covering the ToS Section 2.3 updates and dealing with questions relating to that, before moving on to the changes to the Skill gaming policy, and then addressing questions arising from that.

The following is a transcript of the core of the presentation, split into two parts for ease of reference. Audio recordings are provided, and there will hopefully be a video of proceedings in due course. With reference to the audio recordings provided here, please note:

  • The audio has been edited to remove pauses. repetition or asides, in order to better match the text transcript and allow those who wish to listen as they read
  • There has been no intentional altering of anything said during the presentation and Q&A session, nor has the context of the presentation or answers been altered in any way, other than questions asked in text being the placed within the transcript at the point where they are answered (when compared to chat logs of the event), again for better context
  • Only those questions asked in text which were directly addressed by Agenda have been included in the transcript in order to maintain context with the audio recordings.

The two parts of the transcript, with their associated audio recordings, can be found as follows:

The following links may also be of assistance (will open in new tabs, and are repeated on the relevant pages above):

Terms of Service:

Skill Gaming:

 

Terms of Service – presentation reminder

ToS-SLBA-2
The formal announcement of the presentation

Just a quick reminder to all who are interested. As I blogged on July 24th, there will be a special presentation by Agenda Faromet on the July 2014 Terms of Service updates.

The presentation will take place on Saturday August 2nd, commencing at 10:00 SLT at the he SLBA courtroom.

Agenda is a real life attorney specialising in privacy and internet law operating out of San Francisco, and is a member of the SL Bar Association. She will be talking about both the changes made to Section 2.3 of the Terms of Service (the section relating to IP rights assigned to Linden Lab) and also on the changes to the Lab’s Skill Gaming Policy, which will be coming into effect as of September 1st, 2014 (having been previously scheduled for August 1st, 2014).

I hope to be able to record the meeting and provide a transcript through this blog for those who cannot attend.

The SLBA courtroom
The SLBA courtroom

About the SL Bar Association

The SL Bar Association (SLBA) is a group for legal professionals and others interested in legal issues in Second Life. It is registered as a 501(c)(6) organisation in the United States, and operates in Second Life from the Justitia Virtual Legal Resource Village, which serves as a resource for both attorneys and the general public, and has law offices available to rent on the square, along with general legal information on a variety of topics.  Rental units are also available at sea level.

Details of SLBA talks and presentations can be found on the SLBA website, together with further information on the association and its members.

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