concerning gobbets

Roblox pt. II, Theranos, and dairy farms.

concerning gobbets
Jan Kobell (II), Landscape with Cattle (1804). Rijksmuseum, Netherlands. 

Programming note: I'm on holiday. A brief newsletter this week. A few ideas that I had lying around. Sorry!

gobbet 1: contract law in the metaverse

A few weeks ago, I wrote about the online gaming metaverse, Roblox. Two things to remember:

  1. the game has a virtual currency, Robux. Players exchange this for goods (virtual items) and services (hiring the game design services of other players).
  2. the virtual currency can be exchanged for real money.

The game's Terms of Use make it pretty clear that the use of its virtual currency (Robux) to buy and sell services and virtual goods on its platform does not involve legally enforceable contracts. I wrote:

"Unsurprisingly, Roblox takes the view that economic activity (e.g. selling virtual goods to other players) within its metaverse is not contractual. It is not contractual, because (i) Robux aren’t something of value (and therefore cannot form the basis of a contract) and (ii) no goods are created and sold (virtual goods are not goods). In other words, the economic activity is all play. The Terms of Use (the contract between the player and Roblox) say this:

**[cl. 4A(3)]: "Robux Not Redeemable or Exchangeable. Robux do not: (a) have an equivalent value in real currency (except as through the DevEx program); (b) act as a substitute for real currency; (c) act as consideration for any legally enforceable contract (except where We grant a license to use Robux or as through the DevEx program); or (d) earn interest. Robux are not redeemable or exchangeable for real currency, monetary value, or convertible virtual currency from us or any other third party, except as expressly provided in these Terms or otherwise required by applicable law. Transactions involving the exchange or Robux for virtual items or virtual services on the Platform are not legally enforceable, may not form the basis of any private right of action against Us or any third party, and are governed solely by Us in our sole discretion and application of these Terms.""

Roblox's strict NO CONTRACTS position here is understandable. If the stuff that players do on Roblox (buying and selling, helping one another design games) has some basis in contract, then things get very complicated - e.g. players can sue one another. The whole thing becomes a regulatory nightmare.

But I'm not sure that things are as clear-cut as the Terms of Use suggest. I didn't address this ambiguity last time so let's get into it now.

Scenario: Here we have two Roblox players.

One ("the Game Owner") runs a popular Roblox game called "Golden Spheres", a rip-off of the old TV show "Golden Balls" (hosted by Jasper Carrott). Golden Spheres generates a large monthly income in Robux (remember: this Robux can be exchanged for hard currency).

The other player ("the Game Developer") has a good reputation for being a skilful game dev.

The Game Owner uses Roblox's forums and messaging app to get in touch with the Game Developer. They chat via Roblox's messaging function, and the two parties agree ("the Potential Contract"):

  • That the Game Developer will develop a new level for Golden Spheres.
  • That, in return for developing the new level, the Game Developer will receive 50% of any additional Robux generated by that new level.

The Game Developer spends c.100 hours creating the new level. It's a massive success, bringing in Robux worth many thousands of dollars for the Game Owner.

The Game Owner refuses to pay the Game Developer any Robux.

The Game Developer asks Roblox to resolve the dispute (a procedure set out in the Terms of Use, which is interesting - is this Roblox acknowledging that players have enforceable rights in these situations?). Roblox rules against the Game Developer. There's no procedure for appealing that decision.

What rights does the Game Developer have?

I would guess that the Potential Contract is not enforceable under English law:

  • the players were using the Roblox platform when they came to the agreement.
  • In using the Roblox platform, both players had accepted that the Robux virtual currency could not form the basis of an enforceable contract.
  • The reasonable outside observer looking at the situation would think, "well, they've agreed to those Terms of Use that say that the Robux currency isn't valid for this stuff, and neither party has done anything to suggest that the Terms of Use don't apply in this situation, so I reckon that neither party intended the Potential Contract to be legally enforceable - no contract!"

Here's some questions that might affect that conclusion:

  1. What if the players had come to this agreement - to exchange game development services for Robux - by messaging outside of the Roblox platform (via instagram or discord, say)? Would the Terms of Use step in and prevent that from being an enforceable contract?
  2. What if the Game Developer and the Game Owner included the following in their agreement: "we understand that, under the Terms of Use, Robux are not valid consideration. However, notwithstanding the Terms of Use, we agree that Robux constitute valid consideration for the purposes of our agreement"?
  3. What if the Game Developer and the Game Owner included the following in their agreement: "in return for providing the game development services, the Game Developer will receive an amount in Robux equivalent to $2,000, as determined by the Roblox-Dollar exchange rate on the Roblox website on 1 February 2022 (US$0.0035 cents per 1 Robux)"? That's kind of using Robux as the basis for a contract, but not really.
  4. The Game Owner and Game Developer should be able to agree which law applies to their in-game contract (English, New York, French etc.). What if the law they choose does not recognise the need for consideration in contracts (i.e. the Game Owner is required to pay the Robux whether or not Robux have any legal value)?

I don't know the answer to these questions, but I think they're worth asking. If the stuff happening on the Roblox platform is more contract-y than Roblox's Terms of Use suggest, then those teenage developers that have been screwed out of Robux have more rights than they'd expect.

Also, all of these questions flow from quite an important issue.

When people use online platforms (/metaverse platforms), they are subject to a number of different rules: the rules of their national legal system; the rules of the online platform (i.e. the Terms of Use); and, when they interact with another user, they may be subject to another national legal system (that of the other user). Working out which system applies when and in what way is a nightmare.

These sorts of issues crop up in shipping / large international commercial disputes. In those cases, you spend a ridiculous amount of money working out what the right answer is. This means that, if Silicon Valley's metaverse bet is right and billions of us start to use its platforms for many aspects of our working life, we'll all be affected by the lots-of-different-rules-issue, but we often won't have the legal resources to work out the right answer.

gobbet 2: Theranos at the Watford Employment Tribunal

Last week, I read that Bad Blood book about Elizabeth Holmes, the founder of Theranos - the blood testing company which lied about having the technology to perform a huge number of tests on a fingerprick's worth of blood.

In it, people are being sacked on the whim of Elizabeth Holmes and Ramesh "Sunny" Balwani (Theranos's COO) all the time. I get that this is all part of the sacred American freedom to fire employees with impunity, but it's still quite shocking.

If Theranos is in the UK, there's no way it gets so far whilst lying about its tech. Here's how it would play out:

  1. Elizabeth Holmes lies to investors by telling them the tech works when it doesn't.
  2. Employee confronts Elizabeth Holmes about her lying (just like they did in real life).
  3. Elizabeth Holmes sacks employee for confronting her / not being a true believer.
  4. Employee takes Theranos to an employment tribunal. The employee is able to give a public account of the fact that the tech doesn't work.
  5. There's a big news story about how employees have accused Elizabeth Holmes of lying about the tech.
  6. Elizabeth Holmes is forced to prove that the tech works. She can't.
  7. Theranos is embroiled in scandal.

Right? For all their faults (mainly due to the lack of funding), employment tribunals do good work in the way they cast sunlight onto dodgy corporate practices. Maybe I'm being very naive...

gobbet 3: the farms being sent to the farm

I spoke to a dairy farmer last Friday. She said that it was very hard for small to medium-sized dairy farms to turn a profit. This is principally due to the fact that the price of milk has been low for the last 20 years, far outpaced by inflation.

Most dairy farmers thus rely on the Basic Payment Scheme subsidies (the old EU farm subsidies that we continue to roll over) to stay afloat. The government is committed to removing this payment by 2027. A double figure percentage will be swinged off the subsidy each year.

There will be replacement subsidy regimes, but they will be smaller amounts and focused on specific actions (such as rewilding, certain capital investment). There will be no comparable system of passive subsidies paid out according to the size of a farm.

This gives dairy farmers two options: become more productive in the ordinary business of dairy farming, or start doing other things (those that attract subsidies, or set up profit-making ancillary businesses, such as cheesemaking).

If they don't do these things, they go out of business.

Is it bad if these dairy farmers go out of business?

  • It's bad for the farmers.
  • It's bad for our vision of the countryside as an idyll populated by cows and small farms.
  • It's bad for our food security. Having a large number of suppliers of diverse size reduces the threat posed by external shocks (less need to import dairy / less reliance on a few large dairy producers).
  • It's probably bad for consumers - higher dairy prices.

On the other hand, good for the environment / planet?

  • If larger farms take over a number of smaller dairy farms, then you'd expect there to be economies of scale. Dairy is then produced at a smaller carbon cost.
  • The reduction in supply from farms closing and not being taken over will increase the price of dairy products. Consumption of dairy falls - a good thing for the ol' climate.
  • If farms close and are not taken over by larger farms, then that's huge swathes of land which are no longer being intensively grazed. Ripe for rewilding. You don't even have to do anything except let the fields descend into unmanaged scrubland, an effective carbon sink which allows small birds and mammals to arrive and thrive. This is a fact of great beauty: humans can do nothing and farmland will turn into something useful.

The government probably realises that this loss - of small to medium sized farms that are unable to innovate their way into profitability - is not necessarily a bad thing. In which case, you can get away with not replacing an enormously expensive subsidy regime.

I'll do a proper newsletter next week on the future of farming. It needs more space than I've given it here.

If you're interested in this sort of stuff, then Henry Dimbleby's National Food Strategy is excellent - well-written, interesting, and balanced (without sitting on the fence / dry stone wall).


Photo by Ryan Song on Unsplash

That's all from me. Have an excellent week, dear readers.


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