Liabilities of virtual world developers as intermediary service providers: the case of Second Life

Abstract

Through a review of the EU and the US regulation and case law, this article discusses the extent to which virtual world developers can be held liable as intermediary service providers with regard to potentially infringing user-created and user-uploaded virtual items. Among many virtual worlds, this study focuses on Second Life, developed by Linden, as it allows user-created and uploaded contents, and offers services such as the Marketplace and LindeX exchange, which enable users and the developer to financially benefit from these contents. The article argues that, beyond mere game developers, virtual world developers such as Linden are intermediary service providers and may be liable with regards to user-created and uploaded content on their services. Within the scope of the EU regime, Linden is too active to benefit from the E-Commerce Directive’s safe harbors. However, it should not be considered as an online content-sharing service provider within the scope of the DSM Directive because Second Life does not compete with other online content services for the same audiences. According to the comprehensive protection brought by the DMCA in the US, Linden can benefit from the safe harbors if it takes the necessary steps after becoming aware of specific infringing activity and fulfills the procedural measures listed in the act.