Archive for the ‘Commercial law’ Tag

Do We Need Business “Licenses”?

Thanks to Hamlet Au.

Grace McDunnough has raised an argument on her blog, Phasing Grace, that would threaten in part to explode the way business is done in the virtual world.  Please read the entire article, of course; but the key parts:

…The virtual economy has become such a natural extension of my experience, that it was not until recently that I even stopped to think it odd that I would surrender monies to people, charities, or businesses that were not verifiable in some way.

I would not surrender the equivalent of $100USD to an online retail storefront without ensuring that I had a way to contact them…. However, I have handed over the equivalent of that to purchase a parcel in a virtual world. I am not alone. In Aug2008 alone, there were 10,406 transactions valued at over $50USD between two (or more) largely anonymous entities just in Second Life. What happens if you hand over a sizable chunk of your virtual currency to an entity and don’t receive in return what you thought you were purchasing?

I don’t know, and I hope I don’t have to find out. But just thinking about this led me to a simple conclusion:

We need virtual world business licenses.

I want people to be able to maintain their privacy, and manage their online identities in ways that best suit them, but with provisions for equal access to the virtual marketplace. I don’t know if this was the intent of the infamous “identity verification” movement, but if it was, I may have to rethink my position in that context.

I want to know that there is some way for me to whois a virtual business entity, and better yet I want the equivalent of a Better Business Bureau, but on an scale that covers the virtual world space.

I want there to be governance over the execution of transactions for real and virtual currrencies.

Now the creation of a virtual Better Business Bureau would be a good thing, and I would join in a heartbeat if I could afford it.  I have to wonder about the idea of a business license, though.  Who would administer such a thing, at least in Second Life?

  • Linden Lab?  Despite the moves much yelled over — banking, etc. — the Lab shows no real inclination of becoming more of a governing force on the Grid than it is.  Such things seem handled more on a case-by-case basis.
  • If not Linden Lab, that leaves the Real World government at some level.  But do we really want RL interference in virtual world affairs?  Government-issued licenses tend to be expensive, and business law will differ from country to country.  If you’re doing business from RL USA with someone in, say RL Russia, whose business law would trump?  Or would you need a license from both countries?  From every country in the world that has an avatar resident on the Grid, in a worst-case scenario?  That wold stifle virtual commerce — the great driver of in-world activity — quicker than a war.  Sales die off, the owners of the businesses stop renting space or give up their expensive islands, and Second Life would blow away into the digital sea as the Grid goes dark from its amazing diversity.  (The reality would probably lie somewhere in the center of this alternative, but you never can tell.)

Are there other ways of looking at this?  Would a business license structure actually help SL commerce, which seems to work pretty well already from my experience?  What are your thoughts?

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