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Social Contracts in Virtual Life: The Danger of Terms of Service Agreements

second life
An article in today's New York Times by Chris Nicholson brings home an important lesson about digital life under The Law of Disruption. When social contracts are formed, the medium is often the message.

The story involves the Second Life virtual environment. A couple met and married online through the site, and with virtual currency called Lindens, purchased and furnished an island retreat. After the husband died in real life, the wife could not continue to make maintenance payments on the island. Linden Labs, which runs Second Life, erased all of their shared digital possessions.

In the physical world, the relationships between citizens and their governments are embodied in social contracts, often codified in key documents such as the U.S. Constitution, Magna Carta, and the Charter of Fundamental Rights of the European Union. These documents, of course, are the architectural drawings of social constructs, left to courts and legislatures to implement and interpret.

In digital life, the sovereign is often the operator of a web service. For Second Life, that sovereign is Linden Labs. Other sovereigns include MySpace, Facebook, LinkedIn, Twitter, Scribd, Yahoo!, Google, Microsoft, YouTube and eBay. Depending on the nature of activity supported by the service, the scope of sovereignty can be modest or all-encompassing. The more intimate the activity supported by the service, the more expansive the power of the operator.

Instead of constitutions and charters, digital life is described in much more humble documents--the "terms of service" agreements that users habitually agree to without reading a word. And why should they? ToS documents are written by lawyers for lawyers, in dense language and legal terminology that is intended to intimidate and discourage close (or even cursory) inspection. ToS agreements are one-sided, enforceable by fiat, and non-negotiable.

If you don't want to live by the rules laid out by Linden Labs, where an inability to pay "taxes" results in the confiscation and destruction of your assets, your only choice is to go live your second life somewhere else.

But as more of our physical activities migrate to digital life, the ToS will take on increased significance as a governing document. Users will not accept a charter that they cannot read, let alone one to which they did not contribute.

Some months ago, for example, a group of Facebook users rebelled against proposed changes to the ToS that they believed gave unreasonable power to Facebook to control information contributed by users. (As a social networking site, nearly all of Facebook's content is contributed by users--well, all of the valuable content in any case.)

After over 100,000 Facebook users made use of the tools provided for collective action by Facebook itself to create a "Facebook Users Against the New Terms of Service" page, the company responded quickly. The proposed changes were withdrawn. Henceforth, the company promised, the ToS would be written in English based on joint efforts between the company and its users. "Our terms aren’t just a document that protect our rights," wrote CEO Mark Zuckerberg, "it’s the governing document for how the service is used by everyone across the world. Given its importance, we need to make sure the terms reflect the principles and values of the people using the service."

Given the company's reliance on user support for its value and very survival, Zuckerberg's responsiveness was both admirable and necessary. At the time, Facebook had over 175,000,000 users. It now has over 300,000,000, making it the fourth largest "country" in the world.

As more web services become reliant on user input for their value, expect more user revolts and more compromises by the sovereigns of digital life. The Terms of Service agreement will evolve to become collaborative. New legal institutions--not adaptations of old physical ones optimized for the industrial age--will emerge to implement and adjudicate them.

Indeed, I don't think it's an exaggeration to say that the Facebook revolt signaled the beginning of a new kind of government for digital life, with a new form of law suited to its unique properties.

In law, the replacement of one form of government with another is called a "revolution." Not all revolutions are bad, and not all revolutions are violent.

In the digital life revolution, the first coup was a bloodless one. That's a good sign.