Wednesday, December 18, 2013

Antitrust Laws & Virtual Worlds

Yesterday I made a post in regards to price fixing. What it means, how it happens in second life, How it is illegal, Who to report it to, What the consequences are, How the law is applied, What customers can do, and what why I stand up against this. 

I've seen there was a bit of a confusion with the post therefore I wanted to clear things up. First, I wrote this from a customers perspective. If you are a designer and you bought a template with a specific tos, it is assumed that you read the tos on the product prior to purchase. That means that you may have entered a legal binding. This is a whole different matter that I won't even touch basis with.

With that said, that doesn't mean that either party (designer or template creator) has the right to set a fixed minimum price on a product to sell. This is controlling the market and it is illegal! For smaller businesses who want to rise in the market this can cause an issue as they are not allow to be competitive and offer lower prices. In a court of law they can argue that the person setting the minimum price has made it near impossible for them to make a profit with their small business. 

On the consumers side, they can argue in a court of law that they didn't get a fair price as a merchant might have sold an item for a lesser price if they would have been allowed to. This means, the consumer was blocked from purchasing at a lower price and therefore incurred a loss. You can face a civil lawsuit in this matter. 

You could also be sued privately for unfair practices, unfair competition, and monetary damages.

Following these practices of setting a minimum prices doesn't only exploit and monetarily damages consumers, doesn't let small business rise, but also it affects our real life market!

How Does A Virtual World Affect A Real Life Market?

As I said in my last post there is a conversion in currency where lindens become real life dollars. That affects our market when it is being controlled, monopolizing the virtual world. When you monopolize, you don't allow others a fair chance at business and allow them to be competitive. 

But This Is Lindens NOT Real Life Money, You Are Not Able To Sue Me Because I Don't Follow Real Laws, In The Marketplace In SL There Is NO Real Law.

Then why follow pedophilia laws if sl doesn't follow real life laws? Why follow gambling laws if we don't follow real life laws?

If you think having a different currency can stop you from following the law, PLEASE read these articles. They are based on antitrust laws and virtual worlds. The law can prosecute designers/creators for this.

Antitrust Law and Virtual Worlds by Marques Tracy. In this lengthy yet well written article you will see cases from virtual worlds that have reached federal courts, how there is a economic affect of real money trading in virtual worlds, and how the antitrust laws can apply to virtual worlds.

Intellectual Property and Information Wealth: copyright and related rights edited by Peter K. Yu. Here we see how people can abuse their intellectual properties in order to control the market. I quote "The antitrust laws were designed for precisely this scenario: indeed, the doctrine of copyright misuse has been expressly created to limit contractual abuses of copyrights that lead to control over secondary markets."

A real life case that was in question is the case of Facebook credits. Facebook credits whose virtual currency is different from real life, called Zucchini, was accused of it's system being anti-competitive. The consumer watchdog, a nonprofit consumer advocacy group filed the complaint with the Federal Trade commission. In this case, Facebook didn't allow developers to offer a discount to users. This meant that consumers will have to pay more. Facebook eventually settled with the Federal Trade commission. Although the matter seemed to have been handled then, they were accused again of violating the antitrust laws. I will leave you to read the article.

As you can see, I have provided way more legal links (if the last post didn't have enough) to further back what I am trying to say. There are many designers in second life that thankfully provide consumers/costumers with fair pricing without having a controlled market. As I said in the prior post, I will support ONLY 100% original mesh creators and/or designers that do not have these controlling policies. As a consumer, I am not getting the best price I can get as there are road blocks to this

If you see on the terms of these templates, people are not allowed to have sales, use them for hunts and have other restrictions that limit what best offer a designer would love to offer us (consumer) for their items. As a consumer/costumer I simply cannot sit here and support something, knowing! I am possibly being ripped off. At the end of the day if you purchased a template for 10L or 100,000L, you should be able to sell your creation for whatever price you want so long as you respect the copyrights. 

Allowing the designer to value as they wish allows consumers/customers to choose freely who they want to buy from. Restriction on low prices only makes us, the consumer, spend more for an item we could have possibly gotten for less and limits how a designer wants to run a business.

I cannot support something that is illegal, that cheats off customers, and that monopolizes a market.

I value every designer and I am thankful for each and everyone of them for making my second life experience more enjoyable but I know plenty of stores that don't do this at the cost of buyers. I know the market is horrible if you don't have a limit because people give things out for free, but I am sure there can be a better system constructed without the violation of legal laws and the exploitation of buyers. In another note, I know plenty of businesses like I said who run just well and make great amount of money without breaking the antitrust laws. 

For those of you who want a list of those stores, feel free to im me in world or leave a comment here if you want to see the list up in a post.

Also I started a group called "Consumers United" in second life. Here is the link to join secondlife:///app/group/3e6d0c9a-317b-f6a4-70c3-22e1158d309b/about. It's free. The group is to keep you informed on anything consumer related such as scams, yard sale scams, copybotters etc. We are working on a page where consumers can post reviews and rate businesses. It is a page for customers by customers. 

As Marques Tracy said in his conclusion (the link provided above) "While we should not punish those who have achieved success, we cannot sit idly by and watch as they exploit their market power and destroy competition, often at the expense of the very users they are supposedly trying to attract."

UPDATE: Manufacturer - Imposed Requirements - You can't control the market or impose a price whether minimum or maximum but! you can suggest a retail price. For example "Jeans Template - suggested retail price $200L". And the same creators sellers can legally decide not to sale to those designers that do not price the item at the suggested price. That is a different story. Feel free to click on the link above and read more on how you can legally control your items =]

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