September 22, 2019 Feature

Legal Implications of Public Spaces in Virtual Reality

Daniel B. Koburger

©2019. Published in Landslide, Vol. 12, No. 1, September/October 2019, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

The concept of a virtual public space is the stuff of science fiction: a virtual shopping mall, street, or park—a virtual place that is freely accessible to anyone from anywhere with a device that allows one to freely move and act as if one were in a public space. Garnered by sheer technological advancement, such a space would imitate the sights, sensations, and possibilities of stepping out of one’s actual front door. A virtual public space would allow the user of a virtual reality (VR) headset, or otherwise yet unknown technology, to roam freely among other users, engage in conversations, stroll through a park, or try on the newest sneakers as one’s virtual self to fit one’s real self’s feet, without ever leaving one’s home.

Today, such a world exists only in fiction and motion pictures such as Ready Player One or Avatar, and many technology, infrastructure, and market concerns must be resolved before such a second world comes into existence. Nevertheless, as this article is written, technology prevails that allows users to immerse themselves in VR, consumer behavior has become conditioned to expect uninterrupted access to anyone across the globe at any given time through the digital interface of a smartphone, and industries have harnessed the potential of VR and augmented reality (AR) for more efficient, effective, and potentially risk-containing activities such as manufacturing,1 employee training,2 and sales and marketing.3

Although there currently remain many technological limitations and unknown paths to be tread, the ground has been laid for virtual public spaces. The Internet enables instant global communication; blockchain technology allows for cross-system ownership of digital goods and thereby facilitates interoperability between systems; smartphones and the ubiquitous use thereof demonstrate consumer appetite and aptitude for instant access to interaction, information, goods, and consuming anytime and anywhere;4 and virtual interactive entertainment exists in which players meticulously create their own worlds and their own avatars to participate and communicate in virtual gaming. All the above show that there is a need and that the technological groundwork has been laid for virtual public spaces to exist. At the same time, the urgency to answer the legal questions implicated by technology in the present will be amplified by virtual public spaces in the future, and the difficulties of today’s discussions already cast a shadow on what is to come.

Many of the legal issues that concern the virtual world and its users today—such as virtual ownership of digital goods and freedom of speech on virtual platforms—are viewed by the legislature in favor of the controllers of virtual platforms. Thus, such issues are handled by these platform holders, such as Amazon, Facebook, Yelp, or publishers of video game universes, through end-user license agreements (EULAs) and terms of service (TOS) with few legal boundaries. Through these contractual instruments, the platform holders are granted the freedom to endorse certain behaviors and restrict others like speech and ownership of digital goods. The platform holders’ freedom to self-regulate a space that feels so public to most is founded in the understanding that these virtual platforms are privately owned and, theoretically, not real because they are, technologically as well as legally speaking, merely facilitating communication and information.

The Game Changers: “Viscerality” and Public Space

The significance of a public space in VR for legal discourse stems from two compelling features: (1) the visceral quality of a typical VR experience is so lifelike that it distinguishes this medium from any other digital medium in existence today, and (2) the quasi-freedom of movement, action, and interaction within VR distinguishes this interpretation of this medium from other so-called virtual worlds.

“Viscerality”

While VR experiences are not real, their physical and mental effects on a user are. One of the most frequently cited examples of this effect is an experiment that asks users wearing an Oculus Rift to walk a thin plank high up in the air and jump off at the end of it without any protection such as a virtual parachute or virtual bungee cord attached.5 The reactions of users are diverse, from panic and dread to stepping off the virtual plank and leaning or even falling forward in anticipation of the plummet. As a result of physiological conditioning, despite each user’s knowledge of safe flooring, such reactions persist in the study. There are many more examples showing that users of VR headsets and devices find it difficult to partition the abstract from what their body signals suggest. Users who are hit or slapped in VR react with skin conductance and higher heart rate levels that correspond to being hit in real life.6 These results hold true even if the subject inhabits a VR avatar of a different gender.7 For this reason, VR has been successfully used to treat stress8 and brain damage.9

The human nervous system reacts to stimulation in VR similar to such in the real world.10 In its own way, VR challenges reality in that, even though it is not real, one would have to agree that it feels real. The visceral experience that VR offers sets it apart from experiences such as having a heated debate with others on Facebook, watching a suspenseful movie on Netflix, uploading a photo or video story to Instagram, or competing with other players online in a video game. One could not imagine that any such activities could invoke an actual claim of sexual assault.

Although there has not been an actual claim or suit filed for virtual sexual assault, there already has been an instance of virtual groping reported by a woman in her article on the popular online platform Medium. There, she claims that another user logged into the same VR world engaged in actions that, had they occurred in the physical world, would have been considered sexual assault.11 As this may or may not have the eventual same effects as actual sexual assault in the physical world, the possibility that virtual behavior can inflict similar emotional distress and long-term damage forces the question the victim here asks in her report of the incident: “As VR becomes increasingly real, how do we decide what crosses the line from an annoyance to an actual assault? Eventually we’re going to need rules to tame the wild, wild west of VR multi-player.12 In other words, how does this quasi-real world that gradually undermines the line the law draws between what is real and what is not, between the tangible and intangible, affect how law treats the creators, owners, and users of virtual spaces and their responsibility for the world and the interactions occurring therein?

Today, virtual worlds and digital spaces are granted nearly unlimited contractual freedom through proper drafting of EULAs and TOS. The owner of an online marketplace, Amazon for example, may be subject to contract and property law for the actual exchange of goods and is subject to consumer protection laws. However, access to and use of the platform lay within the hands of the owner. Amazon may delete a user’s account at any time, including any information therein, without respect to any property laws and despite the necessity for and value of the account to the user. Amazon also may require users to communicate in a certain way, without any respect to the user’s right to freedom of speech. Comparably, a social media platform, like Facebook or Instagram, can respectively grant itself the same freedom through its TOS, even if users invest time and resources into their accounts that go beyond efforts performed by many in their nine to five (consider the example of the social influencer, whose economic well-being may depend on such accounts). Similarly, the creators and controllers of a virtual world such as a video game, like Minecraft, are subject to copyright laws. Nevertheless, the publishers of Minecraft have complete discretion over ownership of the content that users create and what the users communicate—despite, again, the value of this content to the user and the time and resources the user invests.

In general, the creators and owners of virtual platforms have near-unlimited control over anything that lies within the scope of the virtual spaces they create, as long as the effects of their actions do not have direct consequences in the physical world. They are granted a safe harbor in respect to infringing content published and created on their platforms as a result of the Digital Millennium Copyright Act (DMCA).13 Because of 47 U.S.C. § 230, they are exempt from being held liable based on “information provided by another information content provider,”14 freeing Yelp, YouTube, and so forth from liability for invasion of privacy, defamation, or intentional infliction of emotional distress in user’s content. Conflicts between users are hardly subject to tort or criminal law, unless they involve infringement on an intangible scale such as defamation, because the interaction is neither physical nor real. As bluntly stated by a federal judge, it is “impossible to defame an avatar because avatars [are not] real, so their reputation [cannot] be injured.”15 At the same time, there are no due process rules, whether out of self-regulation or by law, that self-impose or require due process for deleting accounts or sieving through and deleting content.

This freedom stands partially on the principle of private autonomy, allowing private entities freedom to design their contractual relationship with their contracting partners, i.e., their users. However, the reality is that in the digital world this contractual freedom also relies on the notion that the virtual space, whether it be Amazon, Facebook, Yelp, and so forth, only deals with the intangible of the digital world. This consequence requires rethinking not only when a user is emotionally attached to his or her avatar in a virtual world, but also when actual real physical implications arise out of harm inflicted on the avatar.

Public Space

There is a stark difference between virtual public spaces and how current virtual worlds are designed, the scope of what a user can do in them, and the relationship between virtual worlds and the physical world. Virtual worlds are spaces created by software developers that give users a digital, virtual room where the users can socially interact with other users on the virtual platform. The social interactions that users can engage in are restricted to a certain topic—for example, exchanging their daily activities with friends, as in Instagram, or sharing news or their opinions, as on Facebook or Reddit. The activities may also be restricted to a fantasy world and the activities the avatar chosen by the player can perform within the setting of this fantasy world, as in World of Warcraft.

Importantly, the scope of activities these virtual worlds grant users and players are limited to these virtual worlds and hardly transfer into other virtual worlds, let alone the physical world. Although certain video games have secondary markets where players can sell in-game assets for real currency to other players, or users of social media platforms can exchange their actual opinions or share actual news, the creators and owners mostly do well to restrict such use of the digital content and infrastructure they have created for the users and players. The EULAs and TOS set the tone that the sale on secondary markets will lead to bans from the platform without a claim to reparation for the value inherent in the accounts, that the use of the content on the platforms and in the virtual worlds, whether user- or owner-created, remains within the full ownership of the owners of these platforms, and that the use of certain language or discussion of certain topics that the platform owner considers in the owner’s sole discretion objectionable will lead to a platform ban.

There are some virtual worlds, called “open virtual worlds,” that dilute this demarcation. They grant users the right to monetize in the physical world from certain virtually created content in the virtual world. Some video game publishers welcome players to stream their game play on YouTube or Twitch because of the marketing benefit for the game. These streamers may monetize this activity. However, this exception in virtual worlds is at the whim of the creator—i.e., the creator of the virtual platform may change the EULAs and TOS at any time within its own discretion.

This omnipresent control held by the creators and owners of these virtual worlds is justified in that these closed worlds are privately held and maintained, serve a distinct purpose, mainly for media and entertainment reasons, and either limit the activities a user can perform or are founded on an entirely fictional world. The significance for the physical world that these virtual worlds have is limited. Where they do have significance, the law has generally sided with the platform owners.16

In contrast, a virtual public space is different in that it will serve a purpose that makes access to it for users actually necessary to daily life, and it will give users a much larger freedom of movement and activities to perform in these worlds. Similarly, virtual workplaces are well within the scope of today’s imagination along with virtual universities, each of which would require a user’s access through VR technology. Virtual shopping malls are just as well a possible conception. The environment would allow users to stroll through the virtual shopping mall for leisure, freely choose the virtual stores they want to access, and with the user’s avatar accurately replicating his or her physical real self, purchase goods usable in the physical world. And if such virtual environments are a possibility, so are actual open virtual streets. In these environments, the continuous existence of an avatar that may not be replicated by anyone else, to avoid confusion between the personalities of the avatars, will become of immense importance.

If such environments are privately owned, the discussion whether the creator and owner of the virtual public space has full discretion over behavior, ownership, and communication through its EULAs and TOS becomes even more pressing than under the current discourse about the Internet in general, social media platforms, and Internet service providers. Will owners of virtual public spaces be able to ban certain communication, and how will they be restricted or empowered by freedom of speech? Will users be protected from interference from TOS-grounded bans for their communication? Will virtual public spaces be viewed as a highly interactive entertainment medium presented to viewers or as an actual street and public space? Answers to these questions will give guidance to the amount of government control over freedom of speech in virtual public spaces. In essence, the issue is comparable to the distinction drawn between governmental control over editorial content of newspapers and motion pictures versus the same form of communication in public places, such as stores or restaurants. Similar discourse will follow in respect to protection of virtually created content by users, in particular the protection of avatars and the underlying persona. Finally, there will be discussion as to whether owners of virtual public spaces, given the necessity of access to these spaces, will have to provide due process rules for bans and deletion of content. In some ways, virtual public spaces will have to answer a similar question already answered by the U.S. Supreme Court for private owners of “company towns,” which concluded that these should be considered to be constrained by the First Amendment.17

Outlook: Some Legal Issues

Given the impression of reality that virtual worlds project and the anticipated necessity of access to them, there are more than a handful of issues that arise, some of which are as follows: (1) whether owners will be liable for tort actions among users, and how to proceed against users whose actions could be a basis for a tort claim in the real world; (2) whether specific ownership to virtually created content will exist, and what the implications of such ownership to user interaction and virtual platform control will be; and (3) whether the environment and user communication in virtual public spaces will have the same First Amendment freedom as newspaper or other entertainment mediums.

Intermediary Liability: U.S. Tort Law, Section 230, and the DMCA Takedown Notice

Negligence under U.S. tort law purports that, in general, a person who provides and controls a physical space has the duty of reasonable care to safeguard visitors to the space from harm.18 This rule is based on negligence, and therefore the owner is only liable if the harm to a visitor could have been predicted and there were reasonable, cost-effective, and not unduly burdensome measures against this consequence. The issue here is as significant as it is simple: tort law generally regulates the physical world, not the virtual. In a virtual world, there are no grounds for battery or assault because there is no actual physical contact. Nevertheless, the owner of a virtual public space is in the unique position as creator of that world to set up safeguards to protect from any tort actions, even more so than an owner of a shopping mall in the physical world, because the owner of a virtual public space actually created and controls everything.

If courts were to decide to extend this paradigm into virtual worlds, there remains the exemption pursuant to 47 U.S.C. § 230 whereby “interactive computer service” providers are not liable based on “information provided by another information content provider.” More than actions in VR having a physical effect, anything in the digital world is basically information and content, whether that is textual, audio, or visual communication, and thereby it is easily arguable that even virtual groping is information. Currently, this crux is only solved by contract law, by the EULAs and the TOS. However, it is questionable how effective TOS are given that it is hard to argue that users actually read them. Thus, effective consequences can only be applied after the fact. As sensible as default intermediary negligence liability sounds to move toward stronger protections in virtual spaces, there remains the opposing, and quite so justified, argument that underlies the net neutrality movement: freedom of information and content in the digital world.

In that regard, the DMCA takedown notice has garnered a prominent and arguably effective role to balance out the protection of copyright and facilitate the freedom of the Internet. Copyright liability in this instance is not exempt by 47 U.S.C. § 230 because it concerns infringement on the virtual platform of content created by third parties who are not users of that virtual platform. If one were to argue that the arrival of virtual public spaces shifts their treatment as virtual platforms to treatment as physical public places, the notion of practicality that also underlies the DMCA takedown notice to prevent infringement of third-party content may be tested and shift the responsibility back to the actual infringer, i.e., the user.

Ownership of Virtual Property and Infringement of User Content

When virtual public spaces become ubiquitous and their relevancy becomes absolutely necessary, the lifelike reality one would immerse oneself in would require persistent ownership over the content one creates, in particular over one’s avatar. An avatar in virtual public spaces acquires immense significance to the user. Currently, the time and resources a user invests are neither protected by default nor by the typical platform owner’s TOS. When virtual spaces grow in popularity, an avatar will not only be a product of one’s effort and, as in video games, have monetary value attached to it, but an avatar will also be necessary as a means of identification and distinction of users, and accountability for actions as well. In some way, it will be the extension of one’s personality.

Although such importance will hardly shield from claims for infringing third-party rights, merely requesting via the safe harbor of a DMCA takedown to delete an account or an entire avatar may be insufficient because of the importance of this avatar to the functioning of virtual public spaces. In the same way that an avatar can gain such importance, virtual property will as well. Beyond this protection of users, if an avatar is actually granted more protection by default law against platform owners, a Pandora’s box will open on whether platform users, or even actors in the physical world, can be held liable for defamation or the use of the likeness of an avatar. In the same way that physical tort claims are a topic in virtual public spaces, this discussion of whether virtual property is protected is complementary.

Permissible Content and the First Amendment

As virtual public spaces become more and more relevant to consumers, the private sector will endeavor to control large chunks of this market, similar to what Amazon, Google, and Facebook have done with the Internet. It is highly likely that many virtual public spaces will be privately owned, and thereby these spaces will be subject to different (as in lower) restrictions than government-controlled virtual public spaces. Because of the significant effect of virtual public spaces and the relevancy for daily use, discourse will need to take place on whether these virtual public spaces remain a medium of entertainment, a news outlet, and/or another form of visual, audio, and textual communication, or whether these spaces take on a new area, in which the legal treatment thereof reflects their infrastructural nature.

A good example for this question is how pornography and sex are treated today on the Internet and in motion pictures versus public nudity. Obscenity in entertainment is granted huge leeway by the First Amendment, as opposed to public nudity. In a very technical sense, VR is merely communication of content, text, audio, and visuals, but if one looks at the functional purpose of potential virtual public spaces that emulate in-person pornographic presence, the distinction between communication and entertainment versus infrastructure and public space becomes hard to grasp. Concluding the aforesaid discourse on how much government intervention and regulation will become necessary, the quest for a more appropriate treatment of virtual worlds and content, let alone virtual public spaces, will have an immense effect on what is permissible and specifically how content and communication in the physical and the digital world is viewed.

A Final Word

VR, including virtual public spaces, is a long way from being that what it can be. However, the questions that it poses are not new at all. At the same time, the slow, current legislative reaction to technological development opens the door for contract law to overtake property and tort law, leaving these decisions to Internet giants and monopoly holders. The crux is that these questions are fundamental to our understanding of the new technology. However, one must bear in mind that stronger regulation will lead not only to better protection of users, but also to more restriction on what users can do, like which avatars they may use or virtual property they may create. In that sense, the current discussion regarding balancing protection of third-party property for the purpose of monetizing creative efforts and thereby incentivizing them while simultaneously trying to carve out as much freedom as possible will be increasingly prevalent.

As provocative as this thought experiment on technology and its implications for the law may be, this discourse has little to no value to virtual public spaces because they are yet to exist. However, the benefit drawn from this discussion can shine a light on the current disputes concerning ownership and freedom of speech on virtual platforms (consider the Amazon, Minecraft, or Facebook example). The platform holders can take the lead by self-regulation through their EULAs and TOS. Given that they have the power to create and control the worlds and the rules, through software engineering, programming, and contractual instruments, they have the power to act like a government. For the platform holders to avoid legislative dictation and intervention, it is considerably sensible for the platforms to be highly transparent about user rights regarding their content and actions and how they may exercise these rights. With proactive community management of users’ experience throughout their use of the platform and of the platforms’ attentiveness to user complaints, platform holders can contain issues before they become sensational public hurricanes. Further, platform holders should give users certain rights to their content and information and offer due process that the platforms hold themselves to. Users should be able to actually and efficiently affect the use of the rights granted in EULAs and TOS and should be protected within the contractual boundaries therein. Which exact rights a platform holder should grant is beyond this article, but transparently granting rights and due process is a way of using the contractual power to protect from likely future government intervention.

As an example, the General Data Protection Regulation (GDPR) takes an innovative route, through legislation. The GDPR requires platform holders to, among other obligations, implement privacy by design. This concept requires platform holders to comply with the European Union’s data protection standards throughout the entire platform and a user’s experience at all stages and at any time. It requires the platform holders to grant users specific rights to their data, educate users transparently on how to enforce and protect their rights, be diligent in granting these rights, and design the platform’s software as well as the organization and operation of the platform in a way that at no time infringes or prohibits exercise of any user rights. This rigorous approach sets a sensible example for how to self-regulate and protect from government intervention without having to surrender control over content ownership, speech, movement, or actions.

Endnotes

1. Pamela Oldham, How Virtual Reality Technology Is Changing Manufacturing, Business.com (Nov. 20, 2017), https://www.business.com/articles/virtual-reality-changing-manufacturing/.

2. Chris Morris, Why Walmart and Other F500 Companies Are Using Virtual Reality to Train the Next Generation of American Workers, CNBC (Oct. 30, 2018), https://www.cnbc.com/2018/10/29/why-f500-companies-use-virtual-reality-to-train-workers-of-the-future.html.

3. Greg Nichols, B2B Firms Now Embracing AR/VR as Powerful Sales Tools, ZDNet (July 27, 2018), https://www.zdnet.com/article/b2b-firms-embracing-arvr-as-powerful-sales-tools/.

4. According to Pew Research Center, 96 percent of Americans own and use a cell phone. Mobile Fact Sheet, Pew Res. Ctr. (June 12, 2019), https://www.pewinternet.org/fact-sheet/mobile/.

5. Liat Clark, Walking the Plank with the Oculus Rift Is Stomach-Churning Stuff, Wired UK (May 30, 2013), http://www.wired.co.uk/article/oculus-vr.

6. Mel Slater et al., First Person Experience of Body Transfer in Virtual Reality, 5 PLoS ONE, no. 5, May 2010, at 4, 6.

7. Id. at 1.

8. Matilda Annerstedt et al., Inducing Physiological Stress Recovery with Sounds of Nature in a Virtual Reality Forest—Results from a Pilot Study, 118 Physiology & Behav. 240, 248 (2013); Youssef Shiban et al., Trier Social Stress Test In Vivo and in Virtual Reality: Dissociation of Response Domains, 110 Int’l J. Psychophysiology 47, 54 (2016).

9. Mónica S. Cameirão et al., Neurorehabilitation Using the Virtual Reality Based Rehabilitation Gaming System: Methodology, Design, Psychometrics, Usability and Validation, 7 J. NeuroEngineering & Rehabilitation, no. 48, 2010, at 1, 12; see also Yoram Baram & Ariel Miller, Virtual Reality Cues for Improvement of Gait in Patients with Multiple Sclerosis, 66 Neurology 178 (2006).

10. P.M.G. Emmelkamp et al., Virtual Reality Treatment versus Exposure In Vivo: A Comparative Evaluation in Acrophobia, 40 Behav. Res. & Therapy 509, 510 (2002); Giuseppe Riva et al., Interreality in Practice: Bridging Virtual and Real Worlds in the Treatment of Posttraumatic Stress Disorders, 13 Cyberpsychology Behav. & Soc. Networking 55, 55 (2010).

11. Jordan Belamire, My First Virtual Reality Groping, Medium: Athena Talks (Oct. 20, 2016), https://medium.com/athena-talks/my-first-virtual-reality-sexual-assault-2330410b62ee#.swe1c0pgr.

12. Id.

13. 17 U.S.C. § 512 (providing that a platform is granted a safe harbor from any infringement claim against it by a third party for infringement of that third party’s copyright-protected content by a user on the platform if the platform takes down that content expeditiously).

14. 47 U.S.C. § 230(c).

15. Mark A. Lemley & Eugene Volokh, Law, Virtual Reality, and Augmented Reality, 166 U. Pa. L. Rev. 1051, 1102 (2018).

16. See 17 U.S.C. § 512.

17. Marsh v. Alabama, 326 U.S. 501, 509 (1946).

18. Restatement (Third) of Torts: Liab. for Physical & Emotional Harm § 51 (Am. Law Inst. 2012).

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Daniel B. Koburger is the founder of Koburger Law, a transatlantic law firm with offices in New York and Munich that represents the software, video game, and startup industries, as well as professionals in business immigration coming to the United States.