October 1, 2024 • 54 mins
In this episode, Richard Hoeg dives into California's AB 2426, focusing on digital content ownership and its implications for platforms like the PlayStation Network. He examines legal perspectives on digital goods, compelled speech, and transparency laws. Assembly Member Jackie Irwin's press release and task force recommendations are explored, along with a detailed breakdown of the new law's definitions and provisions. Richard discusses potential adaptations by companies, false advertising concerns, and ambiguities within the law. The episode also covers DRM, online check-ins, and listener questions, concluding with opinions on media preservation, the EU's gaming initiatives, and emulator shutdowns.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:38):
Hello, everybody, and welcome to anotherepisode of Virtual Legality.
I'm your host, Richard Hogue, managing memberof the Hogue Law Business Law Firm of
Northville, Michigan.
And like so many episodes of Virtual Legalitybefore, we are gonna be talking about the state
of California in the United States todaybecause the state of California has recently
enacted a law that will go into effect nextyear that changes the way that some of the
(01:01):
media platforms that we use so regularly andtalk about so regularly here are able to sell
their digital content to you, or more preciselythe licenses to digital content that they do
sell through those platforms, which is reallyat the crux of the issue.
So today, we're gonna talk about all of thatbecause it made some waves in the spaces that I
get my news from and that I look at when we'retalking about video games and whatnot.
(01:24):
So with that said, let's dive in to StevenTotilo's game file.
Now you might remember Steven Totilo from MTVor Kotaku, or Axios.
He now has his own kind of I I hesitate to sayblog.
It seems a little bit reductive.
He makes articles about video games in a spacethat he controls himself, and I find it to be
(01:45):
very useful.
Now I do wanna give a disclaimer there becausewe're talking about things like false
advertising and and truth in advertising.
And so I will give a disclaimer that saysmister Totello has given me a free trial to
game file in the past.
I don't currently have it because I don't wantto spend money on things that I might otherwise
be reporting on or engaging in here in virtuallegality, but it is good content.
(02:10):
He's a good writer, and he often has stuffbefore the other folks do.
So if you're all interested in these things, Ido recommend it, but you can take however you
like.
The fact that I was given a free trial at somepoint in the past to give you that
recommendation.
So Gamefile says new law will change howdigital games are sold, at least in California.
Terms such as buy and purchase will be barredunless a seller clearly warns users they are
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paying for a license that could be revoked.
Now in case you're worried, we're not gonnasettle just for looking at articles, in game
file or Kotaku or some of the other things thatI have here to bring up.
For our understanding of the law, we're gonnalook at the language of the law itself and also
discuss how there are some ambiguities in thatlaw, but we are gonna take as a starting point
what mister Tortillo has to say about the lawhere in this article.
(02:56):
Any retailer that sells a downloadable videogame will soon need to warn customers, at least
in the state of California, that the gamethey're purchasing may not be theirs to play
forever.
That warning will be required in California asof January 1st, thanks to AB 2426, that's
assembly bill, I believe, a consumer protectionand false advertising bill signed earlier this
week by the state's governor, Gavin Newsom.
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The bill makes it illegal for sellers of anydigital goods, games, movies, books, etcetera,
to use terms like buy or purchase during atransaction without the inclusion of a warning
about the potential impermanence of whatthey're paying for.
Now that's something we're gonna discuss aspart of what the law requires as well.
This is perhaps a little bit broader than whatthe law actually says in terms of the summary
(03:37):
here in this article, but it is true that thestate of California has looked at the use of
the buy button and the purchase button inplaces like the PlayStation Network or Xbox
Live or the eShop if you're a Nintendo fan, orother places like Amazon Digital or Vudu now, I
think Fandango at Home, any other place whereyou might find a digital file that you are
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essentially buying a license to and said, hey,that button is maybe confusing for reasonably
minded consumers, which if you've been invirtual legality for a while, you know is
something that I have discussed with you atpoints in time in the past, and we'll get to
that in part of this video as well.
So that's the nature of this law.
The main story that brought this issue to myattention was Sony's announcement at the end of
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last year that digital copies of purchasedcontent from Discovery would be revoked, said
the particular assembly member here, JackieIrwin, referring to the news in December that
PlayStation was about to remove access toDiscovery shows that people had paid for.
And if you recall, we did talk about that herein virtual legality with our myth busted buying
digital, video.
You can check that out in the playlist forvirtual legality or otherwise on the channel.
(04:43):
We also have covered that in other capacitiesin respect of whether Sony was getting sued or
Apple was getting sued over their buy button,and said our digital store is perpetuating
fraud with the buy button.
And I said, look, it may not be fraud and sofar as it's not a lie.
Right?
From a legal perspective, the lawyers in theroom when somebody's asking them about whether
we can use a buy or purchase button canrightfully say, yes.
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You can use a buy or purchase button becauseyou are buying a license.
And just like any other kind of ephemeralright, you can purchase that right subject to
certain conditions.
And that's what's happening with respect todigital goods as I think people that are
regularly in virtual reality know.
But what this California law posits and what Ithink is probably correct is that people that
aren't in virtual reality all the time, peoplethat aren't trained in law or otherwise reading
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all the terms and conditions when they play avideo game, do not realize the use of the term
buy or purchase is referring only to theconcept of buying a license, buying access,
like you buy a ticket to a concert and notbuying a copy of the video game or movie in
question itself, which is a little bit distinctfrom buying a book or a DVD.
And we're gonna talk about that with respect tothis particular assembly person's comments in
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just a minute.
But I did wanna mention that we have talkedabout this in virtual reality at length, and
that virtual reality is a show supported byviewers and listeners like you.
If you'd like to support the channel, we've gotlinks in the description to PlayYour, Patreon,
which I think people are a little bit morefamiliar with, or, of course, through
memberships and super chat messages that youcan deliver as part of the live show.
(06:15):
If you're watching this after the fact inreplay or archive mode, please do leave a
comment to the video or to the place where youare listening to this podcast, and I will try
to get to any comments or questions that youhave in that capacity as well.
But if you like to support the channel, we dohave those mechanisms to do it.
Please don't feel obligated to do so.
We like to do these videos and get thisinformation and content out there so that we
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can better inform people about these questions.
And in part of doing that, we have long talkedabout the PlayStation Network's terms and
conditions because they are perhaps the mostbald about this particular issue.
Every one of these platforms, whether we'retalking about movies or video games or music,
says that you are licensed to content, you'renot sold the content, and puts various
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restrictions around that in their terms ofservice.
But only Sony says, hey.
We're using these buttons, but those buttonsdon't mean what you think they mean.
Use of the terms own, ownership, purchase,sales, sold, sell, rent, or buy in this
agreement, or referring to the PlayStationNetwork agreement, or in connection with
PlayStation Network content does not mean orimply any transfer of ownership of any content,
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data, or software, or any intellectual propertyrights from Sony Interactive Entertainment, its
affiliates, or its licensors to any user orthird party.
And I put out a tweet last week when this newswas making the rounds.
It said, hey.
You know, the fact that I've highlighted thisbit of language so often, I would like to think
was at least partly informative of Californiapassing a law like this.
But in truth, when we get to what the lawactually does, I don't think this is actually
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gonna move the ball very much for Sony, andwe'll see why in just a minute.
But I do think that this kind of concept whereSony essentially sits here and says, yes.
We know we've made those buttons and thosebuttons are probably confusing to you, but
those buttons don't think what you think theywhat don't mean what you think they do, and
we're only going to mention that in paragraph10 of a multi page terms of service document,
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and we think that makes it right for us, isprobably bridging on the edge of, if not false
advertising, misleading advertising.
And it's probably the right thing to say that areasonable minded consumer doesn't fully
understand all of these license terms and thatthe content can be revoked especially when the
platform itself loses the right to transmitwhatever licensed content we're talking about.
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And that this is probably something where youcan justify more transparency from government
edicts and whatnot, where you may have heard invirtual reality me saying that I'm a little bit
reluctant to espouse compelled speech of thistype.
Right?
And we talk about these things and it's easy toback up this transparency or the sunlight or
however you wanna frame a law like this.
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But it is important to note that this is atleast a limited on what we would consider first
amendment, freedom of expression, freedom ofspeech here.
Right?
The the state is coming in and telling anentity that is otherwise engaged in a
commercial activity here that they have to saysomething along with what it is that they are
selling.
And we find that to be mostly okay in theUnited States.
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We have a number of places where that happens.
You can think of, drugs than the Federal DrugAdministration requiring certain disclaimers on
the advertisements, certain things that arelisted on the side of your prescription
medications or even in terms of food, in termsof what is contained within that food.
And so we are generally more willing in theUnited States to permit the state, whether
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that's California, whether that's any otherstate, whether that's the federal government,
to compel speech to force a commercial actor tospeak in certain ways if they want to engage in
commerce, if they wanna sell something to you.
That is seen as less of an egregious affront tothe first amendment than requiring you to say
something political or otherwise when you'reengaged in the public discussion.
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And so this is one of those areas where I thinkeven reasonably minded people could say, yes.
That seems like a good idea, but I'm not sure Iwant Sony or Amazon or anybody else to be
forced to say these things.
I tend to come out on the other side.
But, again, I don't make virtual legalities totell you how to feel about these things.
I just wanna point out that there arereasonable arguments on either side of a
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question like this that says, well, do wereally wanna force them to say these things,
especially with when we look at the law and seethat it's not perhaps as precise as we might
otherwise wanna be at a kind of conceptualperfection basis.
And so we'll look at that in just a minute, butI did wanna point out that the PlayStation
Network terms have long had this littleprovision in them highlighted in red on your
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screen that says even though we use thosebuttons, they don't mean what you think.
And I think that that probably is a problem,and I would expect Sony to not use this
language once this law goes into effect.
But I I don't know that they will remove it asmuch as change where it appears, and we'll talk
about that in just a minute.
Now I did wanna point out that this this newsmade the rounds of everywhere I was looking,
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including video game and tech sites, and aswell as major news sites outside of the gaming
and tech sphere talking about, as The Vergesays here, the fact that California's new law
forces digital stores to admit you're justlicensing content, not buying it.
And this is probably a little regressive or alittle reductive insofar as these companies
have been saying that.
(11:33):
Right?
These companies have been saying that you'reonly licensing the content, you're not buying
it within their terms of service, within theirterms and conditions.
But what this law basically says is you have tohighlight and separate this particular concept,
in a way that you aren't doing when you put itin paragraph 10 of your terms of service.
And so these companies have been telling youthat you are subject to the license that
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they've written into their terms of service,but California says that's not good enough
primarily for the same reasons that we said inour earlier videos, which is that the whole
nature of where fraud exists, whether or notsomebody is falsely advertising to you, is
based on what a reasonable person would assumeis happening in the transaction they're
entering into.
And with a buy button and with a purchasebutton, particularly one that is nested against
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some kind of, rental button, it sure looks likeyou are buying something that in a different
context would mean that you have perpetualrights to that movie or that music or that
video game, when in fact that isn't the caseprimarily because a licensor like a platform
can't actually sell you something that itdoesn't it doesn't have the rights to itself.
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So Sony, except for the games that it makesitself, doesn't have a perpetual unchangeable
right to the things that it transmits throughits platform to you.
So it has to have a term in its licensesomewhere that says if the actual owner of this
material somehow takes it away from us, we haveto be able to cut off access or else we're
infringing all of those intellectual propertyrights.
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And that's normal, but it might not bereasonable to assume for somebody pressing the
buy button that that is happening behind thescenes.
So it's a complicated matter, but I wanted totalk to you all about it because I do think
that it can be reduced a little bit too farwhen we look just at headlines or the way this
is reported on in the video game space.
Or as IGN puts it, California's new law willforce storefronts to disclose that buyers don't
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actually own their digitally purchased media,very similar to the Verge headline.
Right?
And like I just said, they're already tellingyou that, but they have to say it in a
different way, and the disclosure is actuallyonly one of the options that these companies
have been given under the new California law.
We'll talk about that as well.
Kotaku uses a very similar headline.
New law will force companies to admit you don'tactually own digital games.
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And, honestly, this is not the kind of thingthat I think is confusing for people.
They understand they're subject to licenses,but it's still important to go through this
process of discussing with folks that arehitting the buy button or the purchase button
what it is that they are getting.
So here is the press release from Jackie Erwin.
Again, the assembly person that sponsored thisnew law.
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And this kind of press release in a politicalsetting is always something that is very much
in favor of the law being passed.
This is designed to help get them in office orkeep them in office.
So we can use that tilt when we evaluate it,but there's nothing wrong with advocating for a
bill that you proposed.
Assembly member Jackie Erwin's consumerprotection legislation, which addresses the
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increasingly common instance of consumerslosing access to their digital media purchases
through no fault of their own, was signed intolaw today by governor Gavin Newsom.
The legislation AB 2426 requires sellers ofdigital goods such as movies, ebooks, and video
games to disclose to the purchaser that theyare only receiving a license to use the digital
media.
As opposed to implying the consumer hasownership of their digital item in the same way
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they would for a physical copy of a DVD orbook.
Now here, I think that this legislature, andthis legislative member is actually making the
same confusing point that we saw in theheadlines in The Verge and IGN and Kotaku,
which is suggesting that when you purchase adigital license, you're getting something
different from when you buy a physical copy ofa DVD or book.
But that isn't in fact the case.
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Right?
If you walk into your local bookseller or youwalk into your local Best Buy and you buy a DVD
or you buy a book, then you are only buying theinstance of that movie or story that is
contained in that book or DVD.
You know this inherently.
Right?
You don't get a license.
You don't get terms of and condition or termsof service with that book or that movie because
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you know that you are not getting the copyrightto that movie or that book.
You can't just buy a copy of the Lord of theRings and then run a printing press and sell
copies of the Lord of the Rings.
Right?
You know this inherently.
But because it's not digital, it's not veryeasy for them to take it away from you, if they
otherwise don't have the intellectual propertyrights as a publisher themselves.
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And the way those contracts are written is sothat they can have the rights to sell for a
period of time, and anything that's sold fromthat period of time on is yours in the future.
And the intellectual property laws of theUnited States and other jurisdictions around
the world have coverage for this in somethingthat we call the first sale doctrine.
Right?
So copyright as a concept gives the creators ofthese things, whether it's the Lord of the
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Rings or whether it's Men in Black, the movie,the right to control the distribution of their
movie or their or their book.
But there are exceptions to that.
The most primary of which is this for saledoctrine, which says, notwithstanding the
exclusive powers that a copyright holder holds,the owner of a particular copy or phono record
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lawfully made under this title or any perperson authorized by such owner is entitled
without the authority of the copyright owner tosell or otherwise dispose of the possession of
that copy or phono record.
So you can take your copy of the Lord of theRings and sell it, but it doesn't give you the
right to otherwise create a movie out of it, tocreate derivative works out of it, to reproduce
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it, to publicly, otherwise display it, or dovarious other things with that, and we know
that to be the case.
We we understand intrinsically operating in themarket that we do that we don't get those
rights when we buy a book or a DVD.
It's a little bit more unclear when we'retalking about digital goods and what you can do
with a digital file for a piece of music or amovie or a video game, but it isn't actually
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different when we talk about this in thiscontext.
So I do think this is confusing the issue alittle bit here from the legislative member
themselves, and I don't blame them.
This is a confusing area of law, but I didwanna point it out because getting a license to
play a video game isn't so different fromgetting a copy of a book.
It's just you don't have that 1st sale conceptbecause you don't have a specified limited one
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copy of that game or movie to transmit.
And so the fact that this license operatesdifferently isn't so different from buying a a
DVD or a book.
As retailers continue to pivot away fromselling physical media, the need for consumer
protections on the purchase of digital mediahas become increasingly more important, says
the assembly person.
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California is now the 1st state to recognizethat when digital media retailers use terms
like buy and purchase to advertise digitalmedia licenses, they are engaged in false
advertising, added Aaron Parzenowski, professorof law at the University of Michigan.
Go blue.
2nd disclaimer, I am a lawyer, that got his lawdegree from the University of Michigan.
I was not taught by this particular professorprobably after my time, but I am biased towards
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the law professors at the University ofMichigan, so I should mention it here.
Consumers around the world deserve tounderstand that when they spend money on
digital movies, music, books, and games, thoseso called purchases can disappear without
notice.
There is still important work to do in securingconsumers' digital rights, but AB 2426 is a
crucial step in the right direction.
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The task force concluded consumers wouldbenefit from more information on the nature of
the transactions they enter into, includingwhether they are paying for access to content
or for ownership of a copy in order to instillgreater confidence and enhance participation in
the online marketplace.
And this law was passed in response to thattask force as well as a number of other things.
And so I do agree with this overall kind ofthesis.
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I'm a big fan of transparency and a big fan ofdisclosure.
I want people to understand what it is thatthey are buying and perhaps more importantly,
what they aren't.
That's one of the reasons virtual realityexists is to have the conversations that we
have had in this space about things like thePlayStation Network terms and conditions, about
things like the buy button and the purchasebutton.
And in general, I'm in favor of moves like thisone.
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But as is the case with all such things, theproof is in the pudding.
And so we have to actually go look at the lawin order to understand what it is that it does.
So first, we get a big section on definitions.
For purposes of this section, the followingdefinitions apply.
They define clear and conspicuous.
They define digital application or game.
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They define digital audio work, digital audiovisual work, digital book, digital code, and
digital good.
In order to get you to the point where theyactually make the law, which says, it shall be
unlawful for a seller of a digital good toadvertise or offer for sale a digital good to a
purchaser with the terms buy, purchase, or anyother term, which a reasonable person would
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understand to confer an unrestricted ownershipinterest in digital good or alongside an option
for a time limited rental unless either of thefollowing occur, and then we'll see exactly how
the companies are supposed to get out of thisparticular unlawful state.
But it's important to note a couple of things.
1, buy and purchase are specifically singledout here.
So they include as an umbrella concept anyother term which a reasonable person would
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understand to confer an unrestricted ownershipinterest, but specifically the words buy and
purchase are identified as problematic.
When one of the proposals that I had made in myprior videos was that perhaps buy a license or
purchase a license could get you to a placewhere the consumer understands that they are
not getting some copy of the good itself, thatwill be theirs forevermore.
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But that would seem to not be available in thisparticular context because of the specific
nature of including buy and purchase as kind ofoutlawed words.
The second thing I would note is the other termwhich a reasonable person would understand to
confirm unrestricted ownership interest in thedigital good is a moving target.
Right?
One of the things that we have mentioned invirtual legality is that fraud, reasonability,
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every law that really relies on the concept ofreasonability changes as the public notions of
what is happening change.
Right?
If a reasonable person understandsintrinsically that when they hit the buy button
on Vudu or Fandango at home or the PlayStationNetwork or anywhere else, that they're only
getting a license, then this kind of all goesaway except for the fact that they've isolated
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the words buy and purchase here.
So if we can get more information out there, ifpeople can be more educated about how these
things actually work, when a license applies,when it doesn't, what buy means in this
context, then we wouldn't need to be as worriedabout people getting burned, defrauded, or
otherwise lied to as part of this process.
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And so it does represent a moving target, andit is the kind of law that I would prefer to
see basically only talk about reasonableexpectations and reasonable persons because buy
and purchase might wind up having a differentmeaning to people in the very short term.
I don't know about you, but I see that evenwith, the generation right above me.
My parents getting different understanding ofhow these digital platforms work, what they can
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and can't do when streaming applies, how VPNoperates, various other things that we might be
more familiar with or get more familiar with asthe years go on changes what people can expect
in the marketplace.
And so when I look at laws like this, Iabsolutely am in favor of transparency, but I'd
rather have that transparency be directed atspecifically what is confusing to a reasonable
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person rather than calling out words, with thislevel of specificity.
So there are issues there, but putting thoseaside, how do we get out of this if we are Sony
or we're Amazon or we're Vudu or anybody else?
We can get out of it if the seller receives atthe time of each transaction an affirmative
acknowledgment from the purchaser indicatingall of the following, that the purchaser is
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receiving a license to the digital good, andthat might work with buy a license, etcetera, a
complete list of restrictions and conditions ofthe license, which is technically already
included in the terms and and conditions, thataccess to the digital good may be unilaterally
revoked by the seller if they no longer hold aright to the digital good, if applicable.
So you can get an affirmative acknowledgment.
That would look something like a checkbox, ifyou're taking score at home, or it could
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otherwise be a bit of language that you agreedto before hitting the confirm on your credit
card, button, if you're thinking aboutsomething like the Steam interface.
But that would be relatively simple for one ofthese companies to do.
And so the secondary question here is whetheror not this actually does anything at all to
change the behavior of these companies.
Will Sony actually remove this language, orwill they move it to a checkbox in the
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PlayStation Network Store that requires anextra x button press to say, I, as purchaser,
acknowledge that the use of the terms ownownership purchase sale, etcetera, etcetera, do
not confer any of these rights.
I'm only getting a license and maybe some othertweaks to try to make sure that you're in
compliance with the California law.
I would propose that most companies are gonnago forward and do that instead.
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And if that changes any behavior, great.
If if people didn't understand that that waswhat was happening.
But I do have my doubts that will actually bethe net effect at the end of the day.
The other option that these companies have isthe disclosure you saw referenced in the Verge
headline, in the IGN headline, in the Kotakuheadline, which is that the seller can provide
to the consumer before executing eachtransaction a clear and conspicuous statement
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that does both of the following.
States in plain language that buying orpurchasing the digital goods is a license, and
includes a hyperlink QR code or similar methodto access the terms and conditions that provide
full details on the license.
Now I don't know about you, but most of theseplatforms that I use generally have a hyperlink
already to the terms and conditions.
That's one of the ways that I get to them totalk to the to you about all of them in virtual
(25:27):
legality.
So I think that's probably already inexistence.
What this really changes is that there would bea conspicuous notice that the purchase button
is applying only to a license.
And, again, I don't think that changes much ofanything, but I do think that transparency is
an overall net positive for this transaction.
And I think what will move people towardsunderstanding that it's a license even more in
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the future.
Now the one thing that you do also have to askyourself is, will these platforms change only
for California or overall?
I think if they say that you're purchasing alicense in California, that's probably gonna
stick around for the entire platform.
It's probably gonna apply globally for theseplatforms because it doesn't make a lot of
sense to remove that language in the otherjurisdictions when in those other
jurisdictions, it could be implied that withoutthat reference, you're buying something
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different than a license.
So these are the kinds of conversations thatthese corporations will have with their legal
counsel and their compliance counsel, acrossthe world in connection with complying with
this.
But I would expect that this California lawwill change the way these kind of final
purchase mechanisms look across the board onthese platforms because it's gonna be a low
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cost change across their entire platform.
It would probably cost more to actuallymaintain different jurisdictional, looks for
these various things, And I don't anticipatethat they'll lose much in in the course of
sales and that people will shy away from it.
But they might run an AB test for a littlewhile to decide whether that is in fact the
case, run it in California, see if it reallyreduces their their their money, their profits.
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And if it does, then they might they might run2 different types of the store.
And that's that's interesting in and of itself,but you can see that it's it's a pretty limited
requirement here of these companies.
As I said, it's low cost.
This is the kind of regulation and law that ingeneral I can get behind.
I would probably have framed this all morespecifically as the professor from the
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University of Michigan suggested as a versionof false advertising.
I think that the federal law for the FTC Actand the California laws both have the concept
that it's illegal to falsely advertise yourgood or service, and I would have simply said
as part of this that the this, advertising thatyou can purchase a digital good or or service
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that is subject to a license withoutreferencing that license is in itself false
advertising.
I would've I would've framed this in thereverse because that can all fall under your
existing precedent for false advertising and isa better fit, in my opinion, for what we're
talking about here, which is that we don'twanna lie to consumers about what it is that
they are buying rather than kind of puttingtogether a whole different structure.
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But I'm not in charge, and there's nothingreally wrong with this so much as it kind of
runs parallel to the false advertising ruleswhen I think you could have baked them in and
had a little bit more efficiency there.
The section does not apply to any of thefollowing.
Any subscription based service that advertisesor offers for sale access to any digital good
solely for the duration of the subscription, soGame Pass.
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Any digital good that is advertised or offeredto a person for no monetary consideration.
So that's gonna be your free to play games.
What's interesting there is that that'sprobably a loophole insofar as games can make a
lot of money as being advertised or offered toa person for no monetary consideration with
microtransactions and other things that aresold within the game or even the platform if
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we're thinking of something like Roblox.
Right?
So that's one area where you might seecompanies start to move into trying to use that
loophole if this California law proves to beproblematic for their revenues or profits.
Finally, it does not apply to any digital goodthat is advertised or offered to a person that
the seller cannot revoke access to after thetransaction, which includes making the digital
(29:09):
good available at the time of purchase forpermanent offline download to an external
storage source to be used without a connectionto the Internet.
Now this is a little bit ambiguous, and we willsee, in fact, that mister Tortillo, the author
of the original article, found it to be alittle bit ambiguous.
He says, I keep seeing some confusion croppingup over the California law.
As noted in my story, it does not cover gamesthat can be downloaded and played offline.
(29:32):
It's targeted at media that requires anInternet connection that the seller could
revoke access to.
But he rescinded this saying the confusion wasin fact mine.
The law is indeed intended to impact nearly alldigitally, quote, unquote, sold games.
After double checking with the office of thelegislator behind the law, it's clear to me
that exemption c, the one we just read, is notintended for games that merely can be played
(29:55):
offline.
It's intended for digital games that have noDRM.
Hence, her citation of, GOG's approach in ouroriginal interview.
Sorry about that.
I've updated my post.
Indeed, he did.
But I wanted to point out that like any otherstatute, the legislature is not in fact the
final arbiters of what this thing says.
They are essentially the programmers puttingthe code into the engine that will ultimately
(30:19):
be interpreted by courts around California andperhaps further jurisdictions depending on
exactly how this is applied.
And so when you have a bit of language likethis that could be read to say, hey.
If I can download the game to my PlayStationand it runs fine without access to the network,
is PlayStation even impacted by this?
If I can download something from Vudu and keepit on my smart TV or wherever else it might be
(30:43):
held, are they impacted by this?
And the answer is yes.
The intent is to impact those things because ofthe definitions used as part of this law, but
it isn't obvious on its face.
And a smart guy like mister Totilo got lost init, and you can imagine a judge getting lost in
it as well.
So it's always difficult when evaluatingstatutes before they're executed and kind of
(31:03):
run through how the courts are gonna read thesethings, to decide whether they're good or bad
or otherwise.
But I do think there are some ambiguities herethat could potentially cause trouble for
California, and it'll be interesting to see ifthey do, in fact, do so.
But I have to say I did read this as suggestingthat if you've got any kind of check-in at all,
(31:24):
it's gonna be a problem.
And a PlayStation game, a Nintendo Switch game,an Xbox game, still for the most part has a
check-in even if you're gonna play it offline.
You you might see a box very quickly on thePlayStation or the Nintendo that says, checking
to see if access is allowed, checking yourlicenses.
The PlayStation Network went down, I think, fora number of people over the last day, and they
(31:46):
weren't able to access the games that they ownlicenses to because of that check-in kind of
concept.
And that would certainly apply to all of thishere, if the if Sony retains the right to
revoke and has that kind of online check-in.
But it can be unclear, as it's as it's used inparticularity, and especially when a company is
(32:07):
motivated to fight its its application to themin the future.
So we'll have to keep our eyes on that.
But I did wanna point out that reasonablepeople can get confused by the statutory
language.
That's not unusual.
That's not really even a comment on the natureof this law, which I think is relatively well
written, but has some areas for potentialloopholes that I can at least see from afar.
(32:29):
And it'll be interesting to see how it playsout, in real time.
Now last but not least, let's see what elseI've got here.
I did wanna flag, this particular, article,which was about California cracking down on
misleading online purchases, in a, outletcalled Read Write that talks about, again, the
(32:55):
false advertising component of this, talksabout why it was passed, talks about the fact
that Ubisoft withdrew access to its the crewgame, which raised the ire of this particular
assembly person, and we would have seen that inthe press release had we read that part.
But I wanna flag that before we got to the endhere where I will pick up any memberships in
(33:16):
Super Chats.
Thank you all for being here with me today, aswell as answer any other questions or comments
that you all might have on this particulartopic.
Overall, I want people, to understand what'sbeen done here in California.
I want people to know that I'm in general infavor of transparency, but there are reasonable
(33:36):
arguments against the law like this withrespect to forcing or compelling speech, from
commercial actors, and there are reasonablearguments against the way the law in
specificity is written.
And so I don't in preference, don't wantanybody out there just claiming that it's all
good or all bad in any particular way.
But I do wanna encourage the conversation bothhere and elsewhere online because this is this
(34:01):
is good stuff.
This is moving forward with the digitalmarketplace, and these states essentially
catching up to regulations, rules, andinterpretations that probably should have been
done a little bit in the past.
But as I've said here in virtual reality, thelaw is a slow beast, and it tends to adapt very
slowly to technological advancement.
So with that all said, does anybody have anycomments?
(34:24):
Are there any membership things that I need tocatch up on?
I do wanna shout out just because you gifted 10Hogla memberships before the show, and
Brentwood Sheik who gifted 10 Hogla membershipsduring the show.
Thank you so much to both of you.
I cannot do this without support from folkslike you, from the listeners, from the
commenters, from the likes, the up votes, thedown votes, YouTube likes it all.
(34:44):
Please do engage however you see fit with thiscontent, and I will keep making it for you as
long as I am able to do so.
So thank you just because.
Thank you, Brentwood Sheik.
I really appreciate it.
And with that said, let's see if there are anyother questions.
And please do flag them with an ad hoc law or aquestion, colon, or anything else that'll let
me see it.
Tigarette asks, do you think this law willcatch on in other states that tend to be pro
(35:08):
public rights and strong attorney general?
You know, honestly, I don't see this law as onewith a lot of downsides.
You know, you see Sony headquartered inCalifornia.
You see various of the other big tech platformsheadquartered in California.
So you would expect California to be the mostcautious about offending one of these
companies.
But, of course, California is kind of on thebleeding edge of the interpretation of a lot of
(35:31):
these rules.
We saw that with the application of the unfaircompetition rule to the Apple and Epic case.
We see it all the time with respect to thingslike this, which are very kind of consumer
rights spacing.
So I do think you might see it adopted in otherstates.
I think it's a good idea.
I think there's very low risk of a lot ofnegativity towards this particular kind of
(35:52):
rule.
But the question I would have is exactly howthese look in various other jurisdictions
because this is not at all the kind of mostefficient, cleanest, smallest change to the law
way to write one of these.
And so I'd be more likely to see something thatreally does just say, hey.
For purposes of our false advertising statute,which basically every jurisdiction has, it will
(36:14):
be deemed false advertising for you to use,buy, or purchase, or something that a
reasonable person would think gives themuniversal perpetual rights to something if it
is in fact a nonperpetual restricted licensesubject to terms and conditions.
That just saying that in specificity that thiswill be false advertising if you do something
this way is probably enough in some of theseother jurisdictions.
(36:34):
So I might expect something more along thoselines.
But thank you for the question.
I really appreciate it, and I hope I'm beinghelpful in helping folks understand what's
going on.
Bad as a hog asks the question, is it is thefact that Sony is a California company relevant
here?
It is in so fact as they cannot easily escapeCalifornia lawmaking.
Yes.
For the most part, you have to comply withwhatever laws you're selling product or
(36:57):
services into, so that's going to affect mostof these national and global companies in
whatever jurisdiction might pass something likethis.
But if you're headquartered there, it's reallydifficult for might pass something like this.
But if you're headquartered there, it's reallydifficult for you to move your assets around or
not get pinged by this.
So, yes, it matters that they are inCalifornia, that this is a California law.
But even if they were not in California, thefact that they would sell copies of things into
(37:19):
California, all of these platforms are gonnahave to take into account the passage of this
law.
Certainly, their compliance folks, their legalteams understand that this just passed and are
having this conversation in email chainsalready.
I can pretty much guarantee that.
Andre says it's a slow beast.
Nonetheless, it will devour any who try toevade it.
(37:41):
About the law?
Yes.
I think for the most part, the law does catchup to you, although there are certainly
exceptions to that in our history and otherjurisdictions' histories.
But, yes, particularly with respect totechnology, the law moves especially slowly.
And you can see this sometimes if you readthrough supreme court comments or supreme court
opinions on tech related things.
(38:02):
I think I did a video in virtual reality aboutthe supreme court just totally missing the
point on a tech case not so long ago, a coupleof years ago.
But you can look up that on the channel.
I don't actually remember what case I'm talkingabout in this context, so I apologize for that.
But I know I definitely had a a video thattalks about that, and unfortunately, that's
(38:23):
just the nature of the beast.
In order to have that level of expertise in thelaw, you have to be of a certain age.
And at at a certain age, you probably aren't onthe bleeding edge of technology.
I know I'm certainly not at this point in mycareer in life, and so I do my best here in
virtual reality, but I tell even my clientsthat are doing really advanced stuff with
software or technology or life sciences or whathave you that at the end of the day, I will
(38:46):
follow along.
I'm really interested in your business.
I think this is exciting stuff, but I am justthe lawyer.
And I know my contracts.
I know my terms.
I I know the various things we talk about herein virtual reality.
But when you're talking about that James Bondscience thing that is going to change or
revolutionize everything with just a gel, I amas much a layperson in the audience being wowed
(39:07):
by your presentation as anybody else.
So yeah.
Cajun Bauer or Cajun Bowser.
Just I I can read.
I can.
Specifically, SIE, yeah, they can't get aroundthis.
No.
Anybody that's headquartered in Californiacan't really escape the application at the law.
Newsprint, I'm like, just starting, but isn'tevery game purchase just a license, same with
(39:28):
the DVD?
It's limited in how you use it.
Like, you can't sell tickets to a movie andplay DVD.
Yes.
You'll get to that section of the video when Italk about that where I say pretty much exactly
the same thing.
But there is this kind of notion that digitalis different because you don't have that 1st
sale copy to move on even when we understandthat when you buy a book or a DVD, you aren't
getting all of the copyrights to the underlyingmovie.
(39:49):
You're only getting the rights to essentiallyplay that movie, or read that book in your own
home for noncommercial purposes.
Right?
And we understand that, but digital is stillkind of a new a new frontier for the law and
the application of the law.
And so I think this is a good move.
This is a move that probably is a long timecoming to make sure that consumers understand
(40:10):
what they're getting the rights to.
And that's probably not, I think it should besaid, the audience here in virtual reality.
It's probably not the audience even that isregularly reading The Verge or Kotaku or IGN or
the various places that I showed you thearticles from on this topic.
But overall, people that go on and hit theAmazon movie link and say buy, and then find
out 2 months later that that has to be removedbecause Amazon lost the underlying rights to
(40:33):
the source material, and they're surprised bythat.
I do think it's okay for us to wanttransparency there and to have those consumers
have a more understandable transaction becausepeople can be taken advantage of.
We can't expect everybody to understand everyaspect of licensing or intellectual property at
all times in their lives.
I wouldn't apply that even to an intellectualproperty lawyer.
So, yeah, I think that's an important part ofthis conversation.
(40:57):
A Hettinger says, newsprint, the difference isyou have for sale on a DVD.
Yes.
Exactly.
You don't get that for most games.
I mean, you do to the extent that you go andbuy a physical copy of a game, of course, but
for sale only applies to physical copies, andis a difference in the way that digital and
physical sales are made because there is nolimiting reactant to how many times you could
copy a digital thing without a loss infidelity.
(41:19):
So that's an area where the copyright laws, theintellectual property laws overall could
probably use some shoring up.
A legislature or assembly person or houserepresentatives member going in and saying, we
need to talk about not necessarily the digitalcopy should have a for sale doctrine, although
that's certainly an option that you equate the2.
But what exactly the rights are and what theyaren't and the notices that are required for
(41:43):
the copies of digital things that you aregetting and the fact that you don't have that
for sale doctrine.
Again, I think disclosure, clarity, sunshine isthe best answer to most of these advertising
and commercial transaction issues.
Cammelan says this is the updated Steam termsof service, I believe.
Clarity is a good thing.
It wouldn't surprise me if Steam had alreadyupdated.
(42:04):
In fact, I think I got a window that said Steamhad updated the terms.
I just hadn't read it yet.
But that could be what they are adjusting forin this kind of context.
Steam, I don't think operates in California.
I believe they're in Washington, but theycertainly sell a lot of things into California,
so they wouldn't be looking at this as well.
Parallax Abstraction says, hey, Rick.
Still grinding away at work, but glad to seeyou on again.
(42:25):
I'm trying to do this more often.
Just did the PowerWorld episode last week,which I was pretty proud of, seemed to go well
and seemed to get, good context and commentsabout that particular issue with Nintendo.
And now we're talking about another thing thatI wanted to talk about and probably have a few
more topics that I'll hit in the near future.
But I really do appreciate everybody that'sbeen with Virtual Reality, the channel, me,
(42:47):
this whole time because it's been a long roadback to even being able to do these kinds of ad
hoc conversations in Virtual Reality.
And I do apologize for not having more contentout there for the remainder of this year, or
previous to this, the the the year prior.
But I really appreciate everyone that's here.
I gave 10 minutes notice, and we have a 150plus people having this conversation about,
(43:11):
California law that may or may not apply to anygiven person in the chat.
I really appreciate it.
I think it's awesome.
I wanna have these conversations more and moreoften.
So thank you to everyone here, and let's see ifI have any more questions that I wanna hit.
Please, again, if you do have a question orcomment, just mark it with an at hobe law or a
queue or a comment or, of course, a super chat,but don't feel obligated to do any of that, if
(43:34):
you're not so inclined.
And then we will catch you on the next virtualreality.
So Michael j m says, I feel this is a step inthe right direction.
I do too, broadly.
In the execution, leave some something to bedesired, and we'll see exactly how it plays out
in the future.
I question whether it actually moves the needleon consumer confusion.
I think every kind of news item that happens onthis score moves the needle a little bit.
(43:57):
Is this gonna be the final blow that finallyhelps every consumer understand what it is that
they're getting from the PlayStation Network orfrom anywhere else that they purchase their
digital goods from?
Probably not.
But every time a news item like this happens,every time a legislature moves forward with a
transparency item like this, I'd like to thinkthat the the reasonable consumer becomes a
little bit more knowledgeable about what'shappening.
(44:18):
And that overall is good for the entire market.
Stephanie, who says it might become the law ofeverywhere eventually?
I think so.
I I think this level of transparency isrelatively non objectionable to most folks that
are looking at it.
I do think because of that moving target ofreasonability, it might not be necessary in the
long term, and the medium term version of thislaw might be just applying to digital goods
(44:43):
requiring you to be reasonably transparent onwhat a license is giving you and not, and that
that ultimately becomes something thatconsumers automatically are understanding of.
Right?
That you do automatically understand withoutreading any of the internal pages of a book or
the internal copy on a DVD, that you can'tproject it out into your own movie theater and
collect ticket money for it, that that weunderstand these various things about what it
(45:07):
is that we're buying when we buy a copy ofsomething, could ultimately, in the long term,
be applied to digital goods.
But we're still in that transition periodbetween when digital goods didn't exist, they
weren't a thing at all, and when they are justubiquitous everywhere in the marketplace.
M z, thank you for being a member for almost 2years.
(45:27):
Kiddo's a bit crestfallen on being reminded thegames we bought on Steam are just licenses to
play them, not ours forever.
Same with audiobooks.
Well, forever is a long time.
Right?
So, I mean, I do think that you can feel acertain amount of comfort that these companies
that have been operating in this capacity for awhile are likely to continue operating in this
capacity for a while.
I think I have said in virtual reality or inother context on this channel that one of the
(45:49):
reasons that I invested in the Vudu ecosystemfor my TV and movie watching needs was that
Walmart backing them, Walmart created Vudu, wasessentially enough of a proof of life for me to
believe that it was going to exist in areasonable capacity for at least the likely
long length of time that I would want to watchthese various things.
(46:12):
And so I do suggest to everybody that'sentering into any digital ecosystem that you
try to only invest in things that you think aregonna have, existence and security and be run
properly for the length of time that you wouldwant access to the things because all of these
companies, if they go under, are not gonna beable to maintain their platforms in the long
run anyway.
So I do think that it's fair to say, hey.
(46:34):
Yes.
Valve could go under.
Steam could go under.
That would be a bad day.
That would be a bad day for a lot of people,but there are mechanisms in place.
There are things that you can look at to try toprotect you from the worst case scenario.
And one of the things with things like movies,I use Movies at Anywhere, I believe it's
called, that allows you to essentially putlicenses in different lockers at various
platforms to help to help kind of diversifyyour portfolio so that you aren't just invested
(46:59):
in one of these storefronts or one of theseplatforms.
And I think the more the consumers are awarethat this is what they are getting, the more
there will be kind of a natural pressure in themarketplace to have those safety valves.
And I think everybody benefits from thosesafety valves in the long run.
So don't be crestfallen.
Just be understanding of the situation, and letthat help value your purchases in the future.
(47:21):
But thank you so much for the comment, MZ.
I really appreciate it.
That is a hog.
What is your opinion on the stop killing gamesinitiative in the EU?
Do you think it's realistic?
My understanding is that's the name of thepetition from Accursed Farms.
Is that correct?
That is a hog, about essentially supportinggames that have an online component or creating
some kind of alternative to access those games.
Accursed Farms has long been a proponent ofarchival of video games.
(47:45):
I think you might recall early on in virtualreality, I had kind of a a not debate, but a
set of reaction videos that went with thecursed farms, then a conversation with him
about whether or not games as a servicers arefraud.
And while I disagree with those definitions, Icertainly am in favor of people wanting to have
more archival ability with respect to videogames and digital goods in general.
(48:08):
What I'm not in favor of is forcing costlymechanisms of retention on the companies
themselves, because I think we wind up gettingless products and services in the long term.
And I think it's very difficult for aregulatory body of any kind to determine what
the appropriate amount of costs for that are.
So what I'd prefer to see, and maybe thepetition is doing this more than I'm giving it
(48:29):
credit for, is essentially a groundswell ofmarket requesting of that support that it's a
cost to companies that don't do it, thatthey're gonna lose out on profits and revenues
if they don't give you that kind ofcertification or security blanket.
And to the extent that they don't do that,they're going to lose the sales that they would
otherwise have, and so they decide to do itbecause the revenue equation winds up being
(48:52):
what they wanted to do.
I think asking the European Union to kind ofenforce a blanket level of costs on these
companies is probably not the way to go, butreasonable minds can differ on these things.
And I am not sitting here looking at thepetition terms themselves, so I can't really
speak to to it with specificity.
So hopefully, that's helpful.
If it wasn't helpful, I apologize in advance.
(49:15):
Papa Rick says I'm super late.
Hi, everyone.
Hi, Papa Rick.
I was in a meeting at work, and I was followinga Nintendo shutting down another Switch
emulator.
Wild day.
Yep.
Nintendo doesn't like the emulators.
That's certainly the case.
So, Papa Rick, thank you for the update, andthank you for popping in to our impromptu live
show with about 10 minutes notice foreverybody.
(49:35):
Thank you so so much.
Tiger at forever, like the blockbuster lifetimerental pass.
Well, that's a great example actually,Tigarette.
Right?
And I have certainly invested in MMOs, thathave a monthly payment requirement, and I've
invested in their lifetime pass because I Iwanted to get at least 18 months of value out
of it, and that's where the cost equation kindacame out.
But I never bought that under the assumptionthat it would last for 40 years.
(49:59):
I just really wanted to beat, what I thoughtwould be the monthly payment, and I really hate
having kind of debt drags on my my monthlyrevenue sources.
And that's just a me thing.
But, yes, it's certainly the case that when youtalk about a lifetime pass or lifetime entry,
whatever it might be, you are buying it on theunderstanding that it's a kind of investment in
the company itself and its continuingexistence.
(50:21):
And so to some extent, that's what your mindwas licensed to digital goods, certainly.
Brentwood Cheek, almost 2 years.
Thank you, Brentwood Cheek.
I really appreciate you being a member for solong.
It's really nice of you, and I reallyappreciate the support.
Gracefully insane has as a comment.
I feel like the killing of games is part of alarger larger issue with media getting killed
off that basically makes it inaccessiblewithout piracy.
(50:44):
I think that's a bigger conversation, butcertainly, the the fact that games media is
being reduced in size and scope, along with allother kinds of media, if we're being honest.
Right?
This is not a games unique kind of concept,does impact the way we understand the various
aspects of news and life around us.
And I think they are they are connected evenif, I don't think that they're as direct as you
(51:08):
might suggest in your comment here.
So thank you for, the comment, and I doappreciate that memberships, memberships.
See?
I I I I floated my brain floated away there fora second, everybody, that I do appreciate the
businesses, and media and the reduction inscope of those things can change the way we
understand the world around us.
(51:31):
Kai Melon says, my lifetime membership toLiveJournal, and that is all the time being
redefined when I bother to look.
I yeah.
Any type of lifetime membership.
You can have a gym lifetime membership, andthen they close the gym right next to you, and
you the closest one you can get to is 3 hoursaway.
Right?
Every one of these things, it's kind of a longterm perpetual understanding, ease an
investment in one of these companies.
(51:52):
And I think we understand that a little bitmore inherently in the more traditional
marketplaces.
But the better people can understand that inthe digital marketplaces, the better off we're
all gonna be.
Because the extent people are uncomfortablewith that, the companies are gonna have to find
more security blankets in different ways to getus those goods if they're gonna continue in
existence on their own.
So that's my feeling on that.
(52:19):
Tigarette.
Thanks, Hoba.
And it's t I, double g, r like Tigger, but alady Tigger Tigarette.
Thanks again for the great stream, smilingemoji.
Yes.
I meant to say Tigarette.
I apologize for Tigarette.
It's because the Tigers are in the playoffsright now, folks.
The Detroit Tigers that were however many gamesout of the playoffs in Major League Baseball a
month ago are having their playoff game rightnow.
(52:41):
And even though it's right now, I chose tospend it with you because I wanted to have this
conversation, and I'll check on the Tigersafterwards.
So everybody that's a Tigers fan that watch meinstead, I'm sorry about that, but hopefully,
they're winning when we get back to the game.
And yes.
It is Tigarette, not Tigarette.
I apologize for that.
Alright, everybody.
Thank you so much for being here today.
Thank you so much for having this conversation.
(53:02):
If you thought this was helpful, give it alike.
If you thought this was tremendously unhelpful,give it an unlike because YouTube likes
whatever buttons you hit on it.
Otherwise, share it around with folks thatmight be interested in this, and please do let
folks know that we're having theseconversations once again in virtual legality.
I very much appreciate each and every one ofyou.
Thank you so much for being here, and I'llcatch you on the next episode whenever that
(53:23):
might be.
Virtual legality is a YouTube video series withaudio podcast versions presented as commentary
and for education and entertainment purposesonly.
It does not constitute legal advice and doesnot create an attorney client relationship.
If you have legal questions about the topicsdiscussed, please consult your own legal
(53:44):
counsel.
Hello, everybody, and welcome to anotherepisode of Virtual Legality.
I'm your host, Richard Hogue, managing memberof the Hogue Law Business Law Firm of
Northville, Michigan.
And like so many episodes of Virtual Legalitybefore, we are gonna be talking about the state
of California in the United States todaybecause the state of California has recently
enacted a law that will go into effect nextyear that changes the way that some of the
(01:01):
media platforms that we use so regularly andtalk about so regularly here are able to sell
their digital content to you, or more preciselythe licenses to digital content that they do
sell through those platforms, which is reallyat the crux of the issue.
So today, we're gonna talk about all of thatbecause it made some waves in the spaces that I
get my news from and that I look at when we'retalking about video games and whatnot.
(01:24):
So with that said, let's dive in to StevenTotilo's game file.
Now you might remember Steven Totilo from MTVor Kotaku, or Axios.
He now has his own kind of I I hesitate to sayblog.
It seems a little bit reductive.
He makes articles about video games in a spacethat he controls himself, and I find it to be
(01:45):
very useful.
Now I do wanna give a disclaimer there becausewe're talking about things like false
advertising and and truth in advertising.
And so I will give a disclaimer that saysmister Totello has given me a free trial to
game file in the past.
I don't currently have it because I don't wantto spend money on things that I might otherwise
be reporting on or engaging in here in virtuallegality, but it is good content.
(02:10):
He's a good writer, and he often has stuffbefore the other folks do.
So if you're all interested in these things, Ido recommend it, but you can take however you
like.
The fact that I was given a free trial at somepoint in the past to give you that
recommendation.
So Gamefile says new law will change howdigital games are sold, at least in California.
Terms such as buy and purchase will be barredunless a seller clearly warns users they are
(02:34):
paying for a license that could be revoked.
Now in case you're worried, we're not gonnasettle just for looking at articles, in game
file or Kotaku or some of the other things thatI have here to bring up.
For our understanding of the law, we're gonnalook at the language of the law itself and also
discuss how there are some ambiguities in thatlaw, but we are gonna take as a starting point
what mister Tortillo has to say about the lawhere in this article.
(02:56):
Any retailer that sells a downloadable videogame will soon need to warn customers, at least
in the state of California, that the gamethey're purchasing may not be theirs to play
forever.
That warning will be required in California asof January 1st, thanks to AB 2426, that's
assembly bill, I believe, a consumer protectionand false advertising bill signed earlier this
week by the state's governor, Gavin Newsom.
(03:16):
The bill makes it illegal for sellers of anydigital goods, games, movies, books, etcetera,
to use terms like buy or purchase during atransaction without the inclusion of a warning
about the potential impermanence of whatthey're paying for.
Now that's something we're gonna discuss aspart of what the law requires as well.
This is perhaps a little bit broader than whatthe law actually says in terms of the summary
(03:37):
here in this article, but it is true that thestate of California has looked at the use of
the buy button and the purchase button inplaces like the PlayStation Network or Xbox
Live or the eShop if you're a Nintendo fan, orother places like Amazon Digital or Vudu now, I
think Fandango at Home, any other place whereyou might find a digital file that you are
(03:57):
essentially buying a license to and said, hey,that button is maybe confusing for reasonably
minded consumers, which if you've been invirtual legality for a while, you know is
something that I have discussed with you atpoints in time in the past, and we'll get to
that in part of this video as well.
So that's the nature of this law.
The main story that brought this issue to myattention was Sony's announcement at the end of
(04:19):
last year that digital copies of purchasedcontent from Discovery would be revoked, said
the particular assembly member here, JackieIrwin, referring to the news in December that
PlayStation was about to remove access toDiscovery shows that people had paid for.
And if you recall, we did talk about that herein virtual legality with our myth busted buying
digital, video.
You can check that out in the playlist forvirtual legality or otherwise on the channel.
(04:43):
We also have covered that in other capacitiesin respect of whether Sony was getting sued or
Apple was getting sued over their buy button,and said our digital store is perpetuating
fraud with the buy button.
And I said, look, it may not be fraud and sofar as it's not a lie.
Right?
From a legal perspective, the lawyers in theroom when somebody's asking them about whether
we can use a buy or purchase button canrightfully say, yes.
(05:07):
You can use a buy or purchase button becauseyou are buying a license.
And just like any other kind of ephemeralright, you can purchase that right subject to
certain conditions.
And that's what's happening with respect todigital goods as I think people that are
regularly in virtual reality know.
But what this California law posits and what Ithink is probably correct is that people that
aren't in virtual reality all the time, peoplethat aren't trained in law or otherwise reading
(05:30):
all the terms and conditions when they play avideo game, do not realize the use of the term
buy or purchase is referring only to theconcept of buying a license, buying access,
like you buy a ticket to a concert and notbuying a copy of the video game or movie in
question itself, which is a little bit distinctfrom buying a book or a DVD.
And we're gonna talk about that with respect tothis particular assembly person's comments in
(05:54):
just a minute.
But I did wanna mention that we have talkedabout this in virtual reality at length, and
that virtual reality is a show supported byviewers and listeners like you.
If you'd like to support the channel, we've gotlinks in the description to PlayYour, Patreon,
which I think people are a little bit morefamiliar with, or, of course, through
memberships and super chat messages that youcan deliver as part of the live show.
(06:15):
If you're watching this after the fact inreplay or archive mode, please do leave a
comment to the video or to the place where youare listening to this podcast, and I will try
to get to any comments or questions that youhave in that capacity as well.
But if you like to support the channel, we dohave those mechanisms to do it.
Please don't feel obligated to do so.
We like to do these videos and get thisinformation and content out there so that we
(06:38):
can better inform people about these questions.
And in part of doing that, we have long talkedabout the PlayStation Network's terms and
conditions because they are perhaps the mostbald about this particular issue.
Every one of these platforms, whether we'retalking about movies or video games or music,
says that you are licensed to content, you'renot sold the content, and puts various
(07:01):
restrictions around that in their terms ofservice.
But only Sony says, hey.
We're using these buttons, but those buttonsdon't mean what you think they mean.
Use of the terms own, ownership, purchase,sales, sold, sell, rent, or buy in this
agreement, or referring to the PlayStationNetwork agreement, or in connection with
PlayStation Network content does not mean orimply any transfer of ownership of any content,
(07:25):
data, or software, or any intellectual propertyrights from Sony Interactive Entertainment, its
affiliates, or its licensors to any user orthird party.
And I put out a tweet last week when this newswas making the rounds.
It said, hey.
You know, the fact that I've highlighted thisbit of language so often, I would like to think
was at least partly informative of Californiapassing a law like this.
But in truth, when we get to what the lawactually does, I don't think this is actually
(07:50):
gonna move the ball very much for Sony, andwe'll see why in just a minute.
But I do think that this kind of concept whereSony essentially sits here and says, yes.
We know we've made those buttons and thosebuttons are probably confusing to you, but
those buttons don't think what you think theywhat don't mean what you think they do, and
we're only going to mention that in paragraph10 of a multi page terms of service document,
(08:13):
and we think that makes it right for us, isprobably bridging on the edge of, if not false
advertising, misleading advertising.
And it's probably the right thing to say that areasonable minded consumer doesn't fully
understand all of these license terms and thatthe content can be revoked especially when the
platform itself loses the right to transmitwhatever licensed content we're talking about.
(08:36):
And that this is probably something where youcan justify more transparency from government
edicts and whatnot, where you may have heard invirtual reality me saying that I'm a little bit
reluctant to espouse compelled speech of thistype.
Right?
And we talk about these things and it's easy toback up this transparency or the sunlight or
however you wanna frame a law like this.
(08:58):
But it is important to note that this is atleast a limited on what we would consider first
amendment, freedom of expression, freedom ofspeech here.
Right?
The the state is coming in and telling anentity that is otherwise engaged in a
commercial activity here that they have to saysomething along with what it is that they are
selling.
And we find that to be mostly okay in theUnited States.
(09:21):
We have a number of places where that happens.
You can think of, drugs than the Federal DrugAdministration requiring certain disclaimers on
the advertisements, certain things that arelisted on the side of your prescription
medications or even in terms of food, in termsof what is contained within that food.
And so we are generally more willing in theUnited States to permit the state, whether
(09:45):
that's California, whether that's any otherstate, whether that's the federal government,
to compel speech to force a commercial actor tospeak in certain ways if they want to engage in
commerce, if they wanna sell something to you.
That is seen as less of an egregious affront tothe first amendment than requiring you to say
something political or otherwise when you'reengaged in the public discussion.
(10:08):
And so this is one of those areas where I thinkeven reasonably minded people could say, yes.
That seems like a good idea, but I'm not sure Iwant Sony or Amazon or anybody else to be
forced to say these things.
I tend to come out on the other side.
But, again, I don't make virtual legalities totell you how to feel about these things.
I just wanna point out that there arereasonable arguments on either side of a
(10:29):
question like this that says, well, do wereally wanna force them to say these things,
especially with when we look at the law and seethat it's not perhaps as precise as we might
otherwise wanna be at a kind of conceptualperfection basis.
And so we'll look at that in just a minute, butI did wanna point out that the PlayStation
Network terms have long had this littleprovision in them highlighted in red on your
(10:50):
screen that says even though we use thosebuttons, they don't mean what you think.
And I think that that probably is a problem,and I would expect Sony to not use this
language once this law goes into effect.
But I I don't know that they will remove it asmuch as change where it appears, and we'll talk
about that in just a minute.
Now I did wanna point out that this this newsmade the rounds of everywhere I was looking,
(11:12):
including video game and tech sites, and aswell as major news sites outside of the gaming
and tech sphere talking about, as The Vergesays here, the fact that California's new law
forces digital stores to admit you're justlicensing content, not buying it.
And this is probably a little regressive or alittle reductive insofar as these companies
have been saying that.
(11:33):
Right?
These companies have been saying that you'reonly licensing the content, you're not buying
it within their terms of service, within theirterms and conditions.
But what this law basically says is you have tohighlight and separate this particular concept,
in a way that you aren't doing when you put itin paragraph 10 of your terms of service.
And so these companies have been telling youthat you are subject to the license that
(11:55):
they've written into their terms of service,but California says that's not good enough
primarily for the same reasons that we said inour earlier videos, which is that the whole
nature of where fraud exists, whether or notsomebody is falsely advertising to you, is
based on what a reasonable person would assumeis happening in the transaction they're
entering into.
And with a buy button and with a purchasebutton, particularly one that is nested against
(12:19):
some kind of, rental button, it sure looks likeyou are buying something that in a different
context would mean that you have perpetualrights to that movie or that music or that
video game, when in fact that isn't the caseprimarily because a licensor like a platform
can't actually sell you something that itdoesn't it doesn't have the rights to itself.
(12:39):
So Sony, except for the games that it makesitself, doesn't have a perpetual unchangeable
right to the things that it transmits throughits platform to you.
So it has to have a term in its licensesomewhere that says if the actual owner of this
material somehow takes it away from us, we haveto be able to cut off access or else we're
infringing all of those intellectual propertyrights.
(13:02):
And that's normal, but it might not bereasonable to assume for somebody pressing the
buy button that that is happening behind thescenes.
So it's a complicated matter, but I wanted totalk to you all about it because I do think
that it can be reduced a little bit too farwhen we look just at headlines or the way this
is reported on in the video game space.
Or as IGN puts it, California's new law willforce storefronts to disclose that buyers don't
(13:27):
actually own their digitally purchased media,very similar to the Verge headline.
Right?
And like I just said, they're already tellingyou that, but they have to say it in a
different way, and the disclosure is actuallyonly one of the options that these companies
have been given under the new California law.
We'll talk about that as well.
Kotaku uses a very similar headline.
New law will force companies to admit you don'tactually own digital games.
(13:48):
And, honestly, this is not the kind of thingthat I think is confusing for people.
They understand they're subject to licenses,but it's still important to go through this
process of discussing with folks that arehitting the buy button or the purchase button
what it is that they are getting.
So here is the press release from Jackie Erwin.
Again, the assembly person that sponsored thisnew law.
(14:10):
And this kind of press release in a politicalsetting is always something that is very much
in favor of the law being passed.
This is designed to help get them in office orkeep them in office.
So we can use that tilt when we evaluate it,but there's nothing wrong with advocating for a
bill that you proposed.
Assembly member Jackie Erwin's consumerprotection legislation, which addresses the
(14:30):
increasingly common instance of consumerslosing access to their digital media purchases
through no fault of their own, was signed intolaw today by governor Gavin Newsom.
The legislation AB 2426 requires sellers ofdigital goods such as movies, ebooks, and video
games to disclose to the purchaser that theyare only receiving a license to use the digital
media.
As opposed to implying the consumer hasownership of their digital item in the same way
(14:54):
they would for a physical copy of a DVD orbook.
Now here, I think that this legislature, andthis legislative member is actually making the
same confusing point that we saw in theheadlines in The Verge and IGN and Kotaku,
which is suggesting that when you purchase adigital license, you're getting something
different from when you buy a physical copy ofa DVD or book.
But that isn't in fact the case.
(15:15):
Right?
If you walk into your local bookseller or youwalk into your local Best Buy and you buy a DVD
or you buy a book, then you are only buying theinstance of that movie or story that is
contained in that book or DVD.
You know this inherently.
Right?
You don't get a license.
You don't get terms of and condition or termsof service with that book or that movie because
(15:37):
you know that you are not getting the copyrightto that movie or that book.
You can't just buy a copy of the Lord of theRings and then run a printing press and sell
copies of the Lord of the Rings.
Right?
You know this inherently.
But because it's not digital, it's not veryeasy for them to take it away from you, if they
otherwise don't have the intellectual propertyrights as a publisher themselves.
(15:59):
And the way those contracts are written is sothat they can have the rights to sell for a
period of time, and anything that's sold fromthat period of time on is yours in the future.
And the intellectual property laws of theUnited States and other jurisdictions around
the world have coverage for this in somethingthat we call the first sale doctrine.
Right?
So copyright as a concept gives the creators ofthese things, whether it's the Lord of the
(16:24):
Rings or whether it's Men in Black, the movie,the right to control the distribution of their
movie or their or their book.
But there are exceptions to that.
The most primary of which is this for saledoctrine, which says, notwithstanding the
exclusive powers that a copyright holder holds,the owner of a particular copy or phono record
(16:44):
lawfully made under this title or any perperson authorized by such owner is entitled
without the authority of the copyright owner tosell or otherwise dispose of the possession of
that copy or phono record.
So you can take your copy of the Lord of theRings and sell it, but it doesn't give you the
right to otherwise create a movie out of it, tocreate derivative works out of it, to reproduce
(17:04):
it, to publicly, otherwise display it, or dovarious other things with that, and we know
that to be the case.
We we understand intrinsically operating in themarket that we do that we don't get those
rights when we buy a book or a DVD.
It's a little bit more unclear when we'retalking about digital goods and what you can do
with a digital file for a piece of music or amovie or a video game, but it isn't actually
(17:30):
different when we talk about this in thiscontext.
So I do think this is confusing the issue alittle bit here from the legislative member
themselves, and I don't blame them.
This is a confusing area of law, but I didwanna point it out because getting a license to
play a video game isn't so different fromgetting a copy of a book.
It's just you don't have that 1st sale conceptbecause you don't have a specified limited one
(17:56):
copy of that game or movie to transmit.
And so the fact that this license operatesdifferently isn't so different from buying a a
DVD or a book.
As retailers continue to pivot away fromselling physical media, the need for consumer
protections on the purchase of digital mediahas become increasingly more important, says
the assembly person.
(18:16):
California is now the 1st state to recognizethat when digital media retailers use terms
like buy and purchase to advertise digitalmedia licenses, they are engaged in false
advertising, added Aaron Parzenowski, professorof law at the University of Michigan.
Go blue.
2nd disclaimer, I am a lawyer, that got his lawdegree from the University of Michigan.
I was not taught by this particular professorprobably after my time, but I am biased towards
(18:42):
the law professors at the University ofMichigan, so I should mention it here.
Consumers around the world deserve tounderstand that when they spend money on
digital movies, music, books, and games, thoseso called purchases can disappear without
notice.
There is still important work to do in securingconsumers' digital rights, but AB 2426 is a
crucial step in the right direction.
(19:02):
The task force concluded consumers wouldbenefit from more information on the nature of
the transactions they enter into, includingwhether they are paying for access to content
or for ownership of a copy in order to instillgreater confidence and enhance participation in
the online marketplace.
And this law was passed in response to thattask force as well as a number of other things.
And so I do agree with this overall kind ofthesis.
(19:23):
I'm a big fan of transparency and a big fan ofdisclosure.
I want people to understand what it is thatthey are buying and perhaps more importantly,
what they aren't.
That's one of the reasons virtual realityexists is to have the conversations that we
have had in this space about things like thePlayStation Network terms and conditions, about
things like the buy button and the purchasebutton.
And in general, I'm in favor of moves like thisone.
(19:45):
But as is the case with all such things, theproof is in the pudding.
And so we have to actually go look at the lawin order to understand what it is that it does.
So first, we get a big section on definitions.
For purposes of this section, the followingdefinitions apply.
They define clear and conspicuous.
They define digital application or game.
(20:07):
They define digital audio work, digital audiovisual work, digital book, digital code, and
digital good.
In order to get you to the point where theyactually make the law, which says, it shall be
unlawful for a seller of a digital good toadvertise or offer for sale a digital good to a
purchaser with the terms buy, purchase, or anyother term, which a reasonable person would
(20:30):
understand to confer an unrestricted ownershipinterest in digital good or alongside an option
for a time limited rental unless either of thefollowing occur, and then we'll see exactly how
the companies are supposed to get out of thisparticular unlawful state.
But it's important to note a couple of things.
1, buy and purchase are specifically singledout here.
So they include as an umbrella concept anyother term which a reasonable person would
(20:54):
understand to confer an unrestricted ownershipinterest, but specifically the words buy and
purchase are identified as problematic.
When one of the proposals that I had made in myprior videos was that perhaps buy a license or
purchase a license could get you to a placewhere the consumer understands that they are
not getting some copy of the good itself, thatwill be theirs forevermore.
(21:17):
But that would seem to not be available in thisparticular context because of the specific
nature of including buy and purchase as kind ofoutlawed words.
The second thing I would note is the other termwhich a reasonable person would understand to
confirm unrestricted ownership interest in thedigital good is a moving target.
Right?
One of the things that we have mentioned invirtual legality is that fraud, reasonability,
(21:41):
every law that really relies on the concept ofreasonability changes as the public notions of
what is happening change.
Right?
If a reasonable person understandsintrinsically that when they hit the buy button
on Vudu or Fandango at home or the PlayStationNetwork or anywhere else, that they're only
getting a license, then this kind of all goesaway except for the fact that they've isolated
(22:03):
the words buy and purchase here.
So if we can get more information out there, ifpeople can be more educated about how these
things actually work, when a license applies,when it doesn't, what buy means in this
context, then we wouldn't need to be as worriedabout people getting burned, defrauded, or
otherwise lied to as part of this process.
(22:23):
And so it does represent a moving target, andit is the kind of law that I would prefer to
see basically only talk about reasonableexpectations and reasonable persons because buy
and purchase might wind up having a differentmeaning to people in the very short term.
I don't know about you, but I see that evenwith, the generation right above me.
My parents getting different understanding ofhow these digital platforms work, what they can
(22:46):
and can't do when streaming applies, how VPNoperates, various other things that we might be
more familiar with or get more familiar with asthe years go on changes what people can expect
in the marketplace.
And so when I look at laws like this, Iabsolutely am in favor of transparency, but I'd
rather have that transparency be directed atspecifically what is confusing to a reasonable
(23:07):
person rather than calling out words, with thislevel of specificity.
So there are issues there, but putting thoseaside, how do we get out of this if we are Sony
or we're Amazon or we're Vudu or anybody else?
We can get out of it if the seller receives atthe time of each transaction an affirmative
acknowledgment from the purchaser indicatingall of the following, that the purchaser is
(23:29):
receiving a license to the digital good, andthat might work with buy a license, etcetera, a
complete list of restrictions and conditions ofthe license, which is technically already
included in the terms and and conditions, thataccess to the digital good may be unilaterally
revoked by the seller if they no longer hold aright to the digital good, if applicable.
So you can get an affirmative acknowledgment.
That would look something like a checkbox, ifyou're taking score at home, or it could
(23:54):
otherwise be a bit of language that you agreedto before hitting the confirm on your credit
card, button, if you're thinking aboutsomething like the Steam interface.
But that would be relatively simple for one ofthese companies to do.
And so the secondary question here is whetheror not this actually does anything at all to
change the behavior of these companies.
Will Sony actually remove this language, orwill they move it to a checkbox in the
(24:18):
PlayStation Network Store that requires anextra x button press to say, I, as purchaser,
acknowledge that the use of the terms ownownership purchase sale, etcetera, etcetera, do
not confer any of these rights.
I'm only getting a license and maybe some othertweaks to try to make sure that you're in
compliance with the California law.
I would propose that most companies are gonnago forward and do that instead.
(24:39):
And if that changes any behavior, great.
If if people didn't understand that that waswhat was happening.
But I do have my doubts that will actually bethe net effect at the end of the day.
The other option that these companies have isthe disclosure you saw referenced in the Verge
headline, in the IGN headline, in the Kotakuheadline, which is that the seller can provide
to the consumer before executing eachtransaction a clear and conspicuous statement
(25:03):
that does both of the following.
States in plain language that buying orpurchasing the digital goods is a license, and
includes a hyperlink QR code or similar methodto access the terms and conditions that provide
full details on the license.
Now I don't know about you, but most of theseplatforms that I use generally have a hyperlink
already to the terms and conditions.
That's one of the ways that I get to them totalk to the to you about all of them in virtual
(25:27):
legality.
So I think that's probably already inexistence.
What this really changes is that there would bea conspicuous notice that the purchase button
is applying only to a license.
And, again, I don't think that changes much ofanything, but I do think that transparency is
an overall net positive for this transaction.
And I think what will move people towardsunderstanding that it's a license even more in
(25:49):
the future.
Now the one thing that you do also have to askyourself is, will these platforms change only
for California or overall?
I think if they say that you're purchasing alicense in California, that's probably gonna
stick around for the entire platform.
It's probably gonna apply globally for theseplatforms because it doesn't make a lot of
sense to remove that language in the otherjurisdictions when in those other
jurisdictions, it could be implied that withoutthat reference, you're buying something
(26:12):
different than a license.
So these are the kinds of conversations thatthese corporations will have with their legal
counsel and their compliance counsel, acrossthe world in connection with complying with
this.
But I would expect that this California lawwill change the way these kind of final
purchase mechanisms look across the board onthese platforms because it's gonna be a low
(26:33):
cost change across their entire platform.
It would probably cost more to actuallymaintain different jurisdictional, looks for
these various things, And I don't anticipatethat they'll lose much in in the course of
sales and that people will shy away from it.
But they might run an AB test for a littlewhile to decide whether that is in fact the
case, run it in California, see if it reallyreduces their their their money, their profits.
(26:57):
And if it does, then they might they might run2 different types of the store.
And that's that's interesting in and of itself,but you can see that it's it's a pretty limited
requirement here of these companies.
As I said, it's low cost.
This is the kind of regulation and law that ingeneral I can get behind.
I would probably have framed this all morespecifically as the professor from the
(27:18):
University of Michigan suggested as a versionof false advertising.
I think that the federal law for the FTC Actand the California laws both have the concept
that it's illegal to falsely advertise yourgood or service, and I would have simply said
as part of this that the this, advertising thatyou can purchase a digital good or or service
(27:41):
that is subject to a license withoutreferencing that license is in itself false
advertising.
I would've I would've framed this in thereverse because that can all fall under your
existing precedent for false advertising and isa better fit, in my opinion, for what we're
talking about here, which is that we don'twanna lie to consumers about what it is that
they are buying rather than kind of puttingtogether a whole different structure.
(28:02):
But I'm not in charge, and there's nothingreally wrong with this so much as it kind of
runs parallel to the false advertising ruleswhen I think you could have baked them in and
had a little bit more efficiency there.
The section does not apply to any of thefollowing.
Any subscription based service that advertisesor offers for sale access to any digital good
solely for the duration of the subscription, soGame Pass.
(28:24):
Any digital good that is advertised or offeredto a person for no monetary consideration.
So that's gonna be your free to play games.
What's interesting there is that that'sprobably a loophole insofar as games can make a
lot of money as being advertised or offered toa person for no monetary consideration with
microtransactions and other things that aresold within the game or even the platform if
(28:47):
we're thinking of something like Roblox.
Right?
So that's one area where you might seecompanies start to move into trying to use that
loophole if this California law proves to beproblematic for their revenues or profits.
Finally, it does not apply to any digital goodthat is advertised or offered to a person that
the seller cannot revoke access to after thetransaction, which includes making the digital
(29:09):
good available at the time of purchase forpermanent offline download to an external
storage source to be used without a connectionto the Internet.
Now this is a little bit ambiguous, and we willsee, in fact, that mister Tortillo, the author
of the original article, found it to be alittle bit ambiguous.
He says, I keep seeing some confusion croppingup over the California law.
As noted in my story, it does not cover gamesthat can be downloaded and played offline.
(29:32):
It's targeted at media that requires anInternet connection that the seller could
revoke access to.
But he rescinded this saying the confusion wasin fact mine.
The law is indeed intended to impact nearly alldigitally, quote, unquote, sold games.
After double checking with the office of thelegislator behind the law, it's clear to me
that exemption c, the one we just read, is notintended for games that merely can be played
(29:55):
offline.
It's intended for digital games that have noDRM.
Hence, her citation of, GOG's approach in ouroriginal interview.
Sorry about that.
I've updated my post.
Indeed, he did.
But I wanted to point out that like any otherstatute, the legislature is not in fact the
final arbiters of what this thing says.
They are essentially the programmers puttingthe code into the engine that will ultimately
(30:19):
be interpreted by courts around California andperhaps further jurisdictions depending on
exactly how this is applied.
And so when you have a bit of language likethis that could be read to say, hey.
If I can download the game to my PlayStationand it runs fine without access to the network,
is PlayStation even impacted by this?
If I can download something from Vudu and keepit on my smart TV or wherever else it might be
(30:43):
held, are they impacted by this?
And the answer is yes.
The intent is to impact those things because ofthe definitions used as part of this law, but
it isn't obvious on its face.
And a smart guy like mister Totilo got lost init, and you can imagine a judge getting lost in
it as well.
So it's always difficult when evaluatingstatutes before they're executed and kind of
(31:03):
run through how the courts are gonna read thesethings, to decide whether they're good or bad
or otherwise.
But I do think there are some ambiguities herethat could potentially cause trouble for
California, and it'll be interesting to see ifthey do, in fact, do so.
But I have to say I did read this as suggestingthat if you've got any kind of check-in at all,
(31:24):
it's gonna be a problem.
And a PlayStation game, a Nintendo Switch game,an Xbox game, still for the most part has a
check-in even if you're gonna play it offline.
You you might see a box very quickly on thePlayStation or the Nintendo that says, checking
to see if access is allowed, checking yourlicenses.
The PlayStation Network went down, I think, fora number of people over the last day, and they
(31:46):
weren't able to access the games that they ownlicenses to because of that check-in kind of
concept.
And that would certainly apply to all of thishere, if the if Sony retains the right to
revoke and has that kind of online check-in.
But it can be unclear, as it's as it's used inparticularity, and especially when a company is
(32:07):
motivated to fight its its application to themin the future.
So we'll have to keep our eyes on that.
But I did wanna point out that reasonablepeople can get confused by the statutory
language.
That's not unusual.
That's not really even a comment on the natureof this law, which I think is relatively well
written, but has some areas for potentialloopholes that I can at least see from afar.
(32:29):
And it'll be interesting to see how it playsout, in real time.
Now last but not least, let's see what elseI've got here.
I did wanna flag, this particular, article,which was about California cracking down on
misleading online purchases, in a, outletcalled Read Write that talks about, again, the
(32:55):
false advertising component of this, talksabout why it was passed, talks about the fact
that Ubisoft withdrew access to its the crewgame, which raised the ire of this particular
assembly person, and we would have seen that inthe press release had we read that part.
But I wanna flag that before we got to the endhere where I will pick up any memberships in
(33:16):
Super Chats.
Thank you all for being here with me today, aswell as answer any other questions or comments
that you all might have on this particulartopic.
Overall, I want people, to understand what'sbeen done here in California.
I want people to know that I'm in general infavor of transparency, but there are reasonable
(33:36):
arguments against the law like this withrespect to forcing or compelling speech, from
commercial actors, and there are reasonablearguments against the way the law in
specificity is written.
And so I don't in preference, don't wantanybody out there just claiming that it's all
good or all bad in any particular way.
But I do wanna encourage the conversation bothhere and elsewhere online because this is this
(34:01):
is good stuff.
This is moving forward with the digitalmarketplace, and these states essentially
catching up to regulations, rules, andinterpretations that probably should have been
done a little bit in the past.
But as I've said here in virtual reality, thelaw is a slow beast, and it tends to adapt very
slowly to technological advancement.
So with that all said, does anybody have anycomments?
(34:24):
Are there any membership things that I need tocatch up on?
I do wanna shout out just because you gifted 10Hogla memberships before the show, and
Brentwood Sheik who gifted 10 Hogla membershipsduring the show.
Thank you so much to both of you.
I cannot do this without support from folkslike you, from the listeners, from the
commenters, from the likes, the up votes, thedown votes, YouTube likes it all.
(34:44):
Please do engage however you see fit with thiscontent, and I will keep making it for you as
long as I am able to do so.
So thank you just because.
Thank you, Brentwood Sheik.
I really appreciate it.
And with that said, let's see if there are anyother questions.
And please do flag them with an ad hoc law or aquestion, colon, or anything else that'll let
me see it.
Tigarette asks, do you think this law willcatch on in other states that tend to be pro
(35:08):
public rights and strong attorney general?
You know, honestly, I don't see this law as onewith a lot of downsides.
You know, you see Sony headquartered inCalifornia.
You see various of the other big tech platformsheadquartered in California.
So you would expect California to be the mostcautious about offending one of these
companies.
But, of course, California is kind of on thebleeding edge of the interpretation of a lot of
(35:31):
these rules.
We saw that with the application of the unfaircompetition rule to the Apple and Epic case.
We see it all the time with respect to thingslike this, which are very kind of consumer
rights spacing.
So I do think you might see it adopted in otherstates.
I think it's a good idea.
I think there's very low risk of a lot ofnegativity towards this particular kind of
(35:52):
rule.
But the question I would have is exactly howthese look in various other jurisdictions
because this is not at all the kind of mostefficient, cleanest, smallest change to the law
way to write one of these.
And so I'd be more likely to see something thatreally does just say, hey.
For purposes of our false advertising statute,which basically every jurisdiction has, it will
(36:14):
be deemed false advertising for you to use,buy, or purchase, or something that a
reasonable person would think gives themuniversal perpetual rights to something if it
is in fact a nonperpetual restricted licensesubject to terms and conditions.
That just saying that in specificity that thiswill be false advertising if you do something
this way is probably enough in some of theseother jurisdictions.
(36:34):
So I might expect something more along thoselines.
But thank you for the question.
I really appreciate it, and I hope I'm beinghelpful in helping folks understand what's
going on.
Bad as a hog asks the question, is it is thefact that Sony is a California company relevant
here?
It is in so fact as they cannot easily escapeCalifornia lawmaking.
Yes.
For the most part, you have to comply withwhatever laws you're selling product or
(36:57):
services into, so that's going to affect mostof these national and global companies in
whatever jurisdiction might pass something likethis.
But if you're headquartered there, it's reallydifficult for might pass something like this.
But if you're headquartered there, it's reallydifficult for you to move your assets around or
not get pinged by this.
So, yes, it matters that they are inCalifornia, that this is a California law.
But even if they were not in California, thefact that they would sell copies of things into
(37:19):
California, all of these platforms are gonnahave to take into account the passage of this
law.
Certainly, their compliance folks, their legalteams understand that this just passed and are
having this conversation in email chainsalready.
I can pretty much guarantee that.
Andre says it's a slow beast.
Nonetheless, it will devour any who try toevade it.
(37:41):
About the law?
Yes.
I think for the most part, the law does catchup to you, although there are certainly
exceptions to that in our history and otherjurisdictions' histories.
But, yes, particularly with respect totechnology, the law moves especially slowly.
And you can see this sometimes if you readthrough supreme court comments or supreme court
opinions on tech related things.
(38:02):
I think I did a video in virtual reality aboutthe supreme court just totally missing the
point on a tech case not so long ago, a coupleof years ago.
But you can look up that on the channel.
I don't actually remember what case I'm talkingabout in this context, so I apologize for that.
But I know I definitely had a a video thattalks about that, and unfortunately, that's
(38:23):
just the nature of the beast.
In order to have that level of expertise in thelaw, you have to be of a certain age.
And at at a certain age, you probably aren't onthe bleeding edge of technology.
I know I'm certainly not at this point in mycareer in life, and so I do my best here in
virtual reality, but I tell even my clientsthat are doing really advanced stuff with
software or technology or life sciences or whathave you that at the end of the day, I will
(38:46):
follow along.
I'm really interested in your business.
I think this is exciting stuff, but I am justthe lawyer.
And I know my contracts.
I know my terms.
I I know the various things we talk about herein virtual reality.
But when you're talking about that James Bondscience thing that is going to change or
revolutionize everything with just a gel, I amas much a layperson in the audience being wowed
(39:07):
by your presentation as anybody else.
So yeah.
Cajun Bauer or Cajun Bowser.
Just I I can read.
I can.
Specifically, SIE, yeah, they can't get aroundthis.
No.
Anybody that's headquartered in Californiacan't really escape the application at the law.
Newsprint, I'm like, just starting, but isn'tevery game purchase just a license, same with
(39:28):
the DVD?
It's limited in how you use it.
Like, you can't sell tickets to a movie andplay DVD.
Yes.
You'll get to that section of the video when Italk about that where I say pretty much exactly
the same thing.
But there is this kind of notion that digitalis different because you don't have that 1st
sale copy to move on even when we understandthat when you buy a book or a DVD, you aren't
getting all of the copyrights to the underlyingmovie.
(39:49):
You're only getting the rights to essentiallyplay that movie, or read that book in your own
home for noncommercial purposes.
Right?
And we understand that, but digital is stillkind of a new a new frontier for the law and
the application of the law.
And so I think this is a good move.
This is a move that probably is a long timecoming to make sure that consumers understand
(40:10):
what they're getting the rights to.
And that's probably not, I think it should besaid, the audience here in virtual reality.
It's probably not the audience even that isregularly reading The Verge or Kotaku or IGN or
the various places that I showed you thearticles from on this topic.
But overall, people that go on and hit theAmazon movie link and say buy, and then find
out 2 months later that that has to be removedbecause Amazon lost the underlying rights to
(40:33):
the source material, and they're surprised bythat.
I do think it's okay for us to wanttransparency there and to have those consumers
have a more understandable transaction becausepeople can be taken advantage of.
We can't expect everybody to understand everyaspect of licensing or intellectual property at
all times in their lives.
I wouldn't apply that even to an intellectualproperty lawyer.
So, yeah, I think that's an important part ofthis conversation.
(40:57):
A Hettinger says, newsprint, the difference isyou have for sale on a DVD.
Yes.
Exactly.
You don't get that for most games.
I mean, you do to the extent that you go andbuy a physical copy of a game, of course, but
for sale only applies to physical copies, andis a difference in the way that digital and
physical sales are made because there is nolimiting reactant to how many times you could
copy a digital thing without a loss infidelity.
(41:19):
So that's an area where the copyright laws, theintellectual property laws overall could
probably use some shoring up.
A legislature or assembly person or houserepresentatives member going in and saying, we
need to talk about not necessarily the digitalcopy should have a for sale doctrine, although
that's certainly an option that you equate the2.
But what exactly the rights are and what theyaren't and the notices that are required for
(41:43):
the copies of digital things that you aregetting and the fact that you don't have that
for sale doctrine.
Again, I think disclosure, clarity, sunshine isthe best answer to most of these advertising
and commercial transaction issues.
Cammelan says this is the updated Steam termsof service, I believe.
Clarity is a good thing.
It wouldn't surprise me if Steam had alreadyupdated.
(42:04):
In fact, I think I got a window that said Steamhad updated the terms.
I just hadn't read it yet.
But that could be what they are adjusting forin this kind of context.
Steam, I don't think operates in California.
I believe they're in Washington, but theycertainly sell a lot of things into California,
so they wouldn't be looking at this as well.
Parallax Abstraction says, hey, Rick.
Still grinding away at work, but glad to seeyou on again.
(42:25):
I'm trying to do this more often.
Just did the PowerWorld episode last week,which I was pretty proud of, seemed to go well
and seemed to get, good context and commentsabout that particular issue with Nintendo.
And now we're talking about another thing thatI wanted to talk about and probably have a few
more topics that I'll hit in the near future.
But I really do appreciate everybody that'sbeen with Virtual Reality, the channel, me,
(42:47):
this whole time because it's been a long roadback to even being able to do these kinds of ad
hoc conversations in Virtual Reality.
And I do apologize for not having more contentout there for the remainder of this year, or
previous to this, the the the year prior.
But I really appreciate everyone that's here.
I gave 10 minutes notice, and we have a 150plus people having this conversation about,
(43:11):
California law that may or may not apply to anygiven person in the chat.
I really appreciate it.
I think it's awesome.
I wanna have these conversations more and moreoften.
So thank you to everyone here, and let's see ifI have any more questions that I wanna hit.
Please, again, if you do have a question orcomment, just mark it with an at hobe law or a
queue or a comment or, of course, a super chat,but don't feel obligated to do any of that, if
(43:34):
you're not so inclined.
And then we will catch you on the next virtualreality.
So Michael j m says, I feel this is a step inthe right direction.
I do too, broadly.
In the execution, leave some something to bedesired, and we'll see exactly how it plays out
in the future.
I question whether it actually moves the needleon consumer confusion.
I think every kind of news item that happens onthis score moves the needle a little bit.
(43:57):
Is this gonna be the final blow that finallyhelps every consumer understand what it is that
they're getting from the PlayStation Network orfrom anywhere else that they purchase their
digital goods from?
Probably not.
But every time a news item like this happens,every time a legislature moves forward with a
transparency item like this, I'd like to thinkthat the the reasonable consumer becomes a
little bit more knowledgeable about what'shappening.
(44:18):
And that overall is good for the entire market.
Stephanie, who says it might become the law ofeverywhere eventually?
I think so.
I I think this level of transparency isrelatively non objectionable to most folks that
are looking at it.
I do think because of that moving target ofreasonability, it might not be necessary in the
long term, and the medium term version of thislaw might be just applying to digital goods
(44:43):
requiring you to be reasonably transparent onwhat a license is giving you and not, and that
that ultimately becomes something thatconsumers automatically are understanding of.
Right?
That you do automatically understand withoutreading any of the internal pages of a book or
the internal copy on a DVD, that you can'tproject it out into your own movie theater and
collect ticket money for it, that that weunderstand these various things about what it
(45:07):
is that we're buying when we buy a copy ofsomething, could ultimately, in the long term,
be applied to digital goods.
But we're still in that transition periodbetween when digital goods didn't exist, they
weren't a thing at all, and when they are justubiquitous everywhere in the marketplace.
M z, thank you for being a member for almost 2years.
(45:27):
Kiddo's a bit crestfallen on being reminded thegames we bought on Steam are just licenses to
play them, not ours forever.
Same with audiobooks.
Well, forever is a long time.
Right?
So, I mean, I do think that you can feel acertain amount of comfort that these companies
that have been operating in this capacity for awhile are likely to continue operating in this
capacity for a while.
I think I have said in virtual reality or inother context on this channel that one of the
(45:49):
reasons that I invested in the Vudu ecosystemfor my TV and movie watching needs was that
Walmart backing them, Walmart created Vudu, wasessentially enough of a proof of life for me to
believe that it was going to exist in areasonable capacity for at least the likely
long length of time that I would want to watchthese various things.
(46:12):
And so I do suggest to everybody that'sentering into any digital ecosystem that you
try to only invest in things that you think aregonna have, existence and security and be run
properly for the length of time that you wouldwant access to the things because all of these
companies, if they go under, are not gonna beable to maintain their platforms in the long
run anyway.
So I do think that it's fair to say, hey.
(46:34):
Yes.
Valve could go under.
Steam could go under.
That would be a bad day.
That would be a bad day for a lot of people,but there are mechanisms in place.
There are things that you can look at to try toprotect you from the worst case scenario.
And one of the things with things like movies,I use Movies at Anywhere, I believe it's
called, that allows you to essentially putlicenses in different lockers at various
platforms to help to help kind of diversifyyour portfolio so that you aren't just invested
(46:59):
in one of these storefronts or one of theseplatforms.
And I think the more the consumers are awarethat this is what they are getting, the more
there will be kind of a natural pressure in themarketplace to have those safety valves.
And I think everybody benefits from thosesafety valves in the long run.
So don't be crestfallen.
Just be understanding of the situation, and letthat help value your purchases in the future.
(47:21):
But thank you so much for the comment, MZ.
I really appreciate it.
That is a hog.
What is your opinion on the stop killing gamesinitiative in the EU?
Do you think it's realistic?
My understanding is that's the name of thepetition from Accursed Farms.
Is that correct?
That is a hog, about essentially supportinggames that have an online component or creating
some kind of alternative to access those games.
Accursed Farms has long been a proponent ofarchival of video games.
(47:45):
I think you might recall early on in virtualreality, I had kind of a a not debate, but a
set of reaction videos that went with thecursed farms, then a conversation with him
about whether or not games as a servicers arefraud.
And while I disagree with those definitions, Icertainly am in favor of people wanting to have
more archival ability with respect to videogames and digital goods in general.
(48:08):
What I'm not in favor of is forcing costlymechanisms of retention on the companies
themselves, because I think we wind up gettingless products and services in the long term.
And I think it's very difficult for aregulatory body of any kind to determine what
the appropriate amount of costs for that are.
So what I'd prefer to see, and maybe thepetition is doing this more than I'm giving it
(48:29):
credit for, is essentially a groundswell ofmarket requesting of that support that it's a
cost to companies that don't do it, thatthey're gonna lose out on profits and revenues
if they don't give you that kind ofcertification or security blanket.
And to the extent that they don't do that,they're going to lose the sales that they would
otherwise have, and so they decide to do itbecause the revenue equation winds up being
(48:52):
what they wanted to do.
I think asking the European Union to kind ofenforce a blanket level of costs on these
companies is probably not the way to go, butreasonable minds can differ on these things.
And I am not sitting here looking at thepetition terms themselves, so I can't really
speak to to it with specificity.
So hopefully, that's helpful.
If it wasn't helpful, I apologize in advance.
(49:15):
Papa Rick says I'm super late.
Hi, everyone.
Hi, Papa Rick.
I was in a meeting at work, and I was followinga Nintendo shutting down another Switch
emulator.
Wild day.
Yep.
Nintendo doesn't like the emulators.
That's certainly the case.
So, Papa Rick, thank you for the update, andthank you for popping in to our impromptu live
show with about 10 minutes notice foreverybody.
(49:35):
Thank you so so much.
Tiger at forever, like the blockbuster lifetimerental pass.
Well, that's a great example actually,Tigarette.
Right?
And I have certainly invested in MMOs, thathave a monthly payment requirement, and I've
invested in their lifetime pass because I Iwanted to get at least 18 months of value out
of it, and that's where the cost equation kindacame out.
But I never bought that under the assumptionthat it would last for 40 years.
(49:59):
I just really wanted to beat, what I thoughtwould be the monthly payment, and I really hate
having kind of debt drags on my my monthlyrevenue sources.
And that's just a me thing.
But, yes, it's certainly the case that when youtalk about a lifetime pass or lifetime entry,
whatever it might be, you are buying it on theunderstanding that it's a kind of investment in
the company itself and its continuingexistence.
(50:21):
And so to some extent, that's what your mindwas licensed to digital goods, certainly.
Brentwood Cheek, almost 2 years.
Thank you, Brentwood Cheek.
I really appreciate you being a member for solong.
It's really nice of you, and I reallyappreciate the support.
Gracefully insane has as a comment.
I feel like the killing of games is part of alarger larger issue with media getting killed
off that basically makes it inaccessiblewithout piracy.
(50:44):
I think that's a bigger conversation, butcertainly, the the fact that games media is
being reduced in size and scope, along with allother kinds of media, if we're being honest.
Right?
This is not a games unique kind of concept,does impact the way we understand the various
aspects of news and life around us.
And I think they are they are connected evenif, I don't think that they're as direct as you
(51:08):
might suggest in your comment here.
So thank you for, the comment, and I doappreciate that memberships, memberships.
See?
I I I I floated my brain floated away there fora second, everybody, that I do appreciate the
businesses, and media and the reduction inscope of those things can change the way we
understand the world around us.
(51:31):
Kai Melon says, my lifetime membership toLiveJournal, and that is all the time being
redefined when I bother to look.
I yeah.
Any type of lifetime membership.
You can have a gym lifetime membership, andthen they close the gym right next to you, and
you the closest one you can get to is 3 hoursaway.
Right?
Every one of these things, it's kind of a longterm perpetual understanding, ease an
investment in one of these companies.
(51:52):
And I think we understand that a little bitmore inherently in the more traditional
marketplaces.
But the better people can understand that inthe digital marketplaces, the better off we're
all gonna be.
Because the extent people are uncomfortablewith that, the companies are gonna have to find
more security blankets in different ways to getus those goods if they're gonna continue in
existence on their own.
So that's my feeling on that.
(52:19):
Tigarette.
Thanks, Hoba.
And it's t I, double g, r like Tigger, but alady Tigger Tigarette.
Thanks again for the great stream, smilingemoji.
Yes.
I meant to say Tigarette.
I apologize for Tigarette.
It's because the Tigers are in the playoffsright now, folks.
The Detroit Tigers that were however many gamesout of the playoffs in Major League Baseball a
month ago are having their playoff game rightnow.
(52:41):
And even though it's right now, I chose tospend it with you because I wanted to have this
conversation, and I'll check on the Tigersafterwards.
So everybody that's a Tigers fan that watch meinstead, I'm sorry about that, but hopefully,
they're winning when we get back to the game.
And yes.
It is Tigarette, not Tigarette.
I apologize for that.
Alright, everybody.
Thank you so much for being here today.
Thank you so much for having this conversation.
(53:02):
If you thought this was helpful, give it alike.
If you thought this was tremendously unhelpful,give it an unlike because YouTube likes
whatever buttons you hit on it.
Otherwise, share it around with folks thatmight be interested in this, and please do let
folks know that we're having theseconversations once again in virtual legality.
I very much appreciate each and every one ofyou.
Thank you so much for being here, and I'llcatch you on the next episode whenever that
(53:23):
might be.
Virtual legality is a YouTube video series withaudio podcast versions presented as commentary
and for education and entertainment purposesonly.
It does not constitute legal advice and doesnot create an attorney client relationship.
If you have legal questions about the topicsdiscussed, please consult your own legal
(53:44):
counsel.
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