Back in the first decade of 2000-s there was a high expectation among technologically perceptive lawyers of legal aspects of videogame industry, especially of such products as massive multiplayer online games. A few initial books and articles on the topic, one of the most popular being the book by Benjamin T. Duranske’s ‘Virtual Law: Navigating Legal Landscape of Virtual Worlds’, were based on the hypothesis that soon, if not in a matter of days, a whole new branch of law would appear. A completely new world is created by means of computer simulation. The relationships inside such world are, however, between real people who feel real emotions, and have real interests, rights and objects of legal protection. However, in particular, it is not clear the law of which jurisdiction shall apply, if it should be applied at all, and where to draw the “magic circle” that divides real worlds with enforceable laws and virtual world that might turn to be a jurisdiction of its own. Unfortunately or not, by this date the virtual law project has not succeeded for various reasons. However, there still is a number of legal problems which are not a routine matters of corporate or contract law and relate specifically to the nature of videogames. What is state of the art by 2020 in Russia?
According to Newzoo data, Russian videogame market has 65.2 million players. Approximate calculation of money they spent on videogame products in 2018 is USD 1.7 billion. Russia’s games market is No. 11 in the world rank. As the analytics highlight, “60% of men and 39% of women play PC games, while 21% of men and 13% of women play console games. The majority (81%) of paying gamers spent money on in-game items or virtual goods in the past six months”. In this context, Russian law is developing rapidly in all things related to intellectual property, technology and information. The Internet media and digital entertainment industries are no longer uncharted waters for the courts and authorities. New cases and areas of concern emerge. This is due in large part to the fact that the closest field, the Internet business, is already receiving both regulatory attention and opportunities to better structure business and protect rights using tools provided by the legal system. The most relevant trends of the Russian jurisdiction seem to be twofold:
- embracing the idea that the rules of the “real law” apply equally on the Internet (and everything associated with it), in contrast to considering it as an area where self-regulation is predominant, and
- promoting an approach where access in Russia to those resources which target the Russian market shall be subject to Russian law, at least to a certain critical and reasonable (from the state standpoint) extent.
This suggests that launching a product for the Russian market now may require more attention than before and includes both obvious areas, such as advertising restrictions, regulation of audiovisual services and others, not mentioned here explicitly, and new areas that might soon become relevant for the game industry, as in other areas. That said, the following array of less conventional questions may arise, or already have arisen, on the Russian market in the corresponding areas of law:
- Intellectual property: can the “quoting” of a gun or a car in a video game raise concerns from the IP rights owner of the object’s design or patent? This is one of the questions of recent interest to video game companies on the Russian market. The short answer would be “rather, yes”. This problem, of course, is not Russian-specific, and has already received a coverage in other jurisdictions. In the US, for example, the matter may different turn to the discussion of whether using some realistic model in a videogame is actually protected by the First Amendment.
- Content restrictions: how freely can the events of the Second World War be interpreted where the USSR is concerned? This question, which is relevant for many video games based on military history, recently became topical in view of Article 354.1 of the Criminal Code “Rehabilitation of Nazism” which includes denial of facts established by the Nuremberg Tribunal, approval of war crimes and providing intentionally false information about the role of the USSR in WWII. This article was introduced back in 2014. Since then, although the game industry has not been affected yet, there have been a few media reports of law enforcement authorities checking posts of social network users on that point. In addition, there are a number of other kinds of restricted publicly offensive information (child pornography, illegal drugs, suicide, etc.), and grounds for courts to declare a broad range of publicly offensive information as illegal. Russian law, as a general rule, does not distinguish between fiction and non-fiction, and the authorities may resort to website blocking even in non-criminal cases.
- Age ratings: should an ESRB or PEGI age rating be adjusted for the Russian market? Leaving aside cases where an international or foreign rating was rather conservative, the chances are high that an ESRB or PEGI age rating should be adjusted for the Russian market. The Russian Child Protection Law provides a number of very specific and peculiar criteria that are applied to different age categories. For instance, in addition to other aspects, violence shown in the 0+ category should imply that good defeats evil, and in each age, category violence should be justified by the genre and/or plot. Besides age ratings intricacies, Russian law takes a strong stance against positive depiction of “non-traditional sexual relationships” for minors, where fines may be as much as RUB 1 million.
- User data: is the users’ data “personal data” and should we keep it localized in Russia? This is one of the “hottest” questions of the season deriving from the broad definition of personal data contained in the Personal Data Law, the “localization amendment” which came into effect on September 1, 2015. This has been reinforced by the fact that on November 10, 2016, Moscow City Court supported the blocking of the LinkedIn social network in Russia for noncompliance with the data localization requirement until the company brings its procedures into compliance with the rule. Similar logic is presented in the cases of 2019, where the court deemed it mandatory for Facebook and Twitter to responds to the requests of the Russian Internet authority (Roskomnadzor). Thus, the state’s position on the application of this rule is that a service that processes personal data of Russian citizens and targets the Russian market must have a local server. Video games are not an exception, although it seems they are not on the regulatory radar on the date of this writing. The latest stage where this problem should be considered is when a company receives a formal inquiry from Roskomnadzor about how the company complies or intends to comply with the rule. Moreover, may of videogame features (ordinary chats, voice chats, forums etc.) can be considered as “communication service” that falls under “Yarovaya Law”. This widely discussed anti-terrorist package that came into effect on July 1, 2018, prescribes to store contents of user communication locally in case the provider is found to fall under the scope of these rules.
- Gambling: would certain loot box mechanics in a collectible card game with random elements and prizes be considered as a gambling game? Russian law disfavors gambling and often blocks gambling websites that are found to be illegal, unless they are provided by locally registered providers who comply with a number of very strict rules that are almost never relevant for video game companies. The answer would depend on a number of factors, but, as a general rule, in contrast to some other jurisdictions, in Russia “gambling” is any risk-based agreement on a prize, as the law puts it. In most cases, “risk” means the random possibility of losing some real value. This would mean that entertainment video games would normally not be considered as gambling games, while some of the ways tournaments are arranged could. However, the devil is in the details, and it would always be prudent to double-check the elements of game design, especially if the game may remind some authority of a gambling game by using cards, roulettes or slot machines.
- Consumer rights: a game company provides a freemium game where users can buy virtual property from the company, and accidentally blocked one of the users. Can she sue the company? As of this writing, case law in Russia has examples of the position that providing video games to users online is more of a service, and not [just] licensing. This would mean that services that have implied at least one payment, whatever the amount, would fall within the concept of the consumer contract. Consumer rights in Russia are similar to those in the EU. Users are entitled to receive proper information about the product and to seek remedies to protect their rights if something is wrong. Furthermore, it is no longer difficult for a consumer to claim that a Russian court should have jurisdiction over the case due to a direct rule of the Civil Code that provides for such grounds. Nevertheless, in contrast to many jurisdictions, this is not a settled case yet. In some situations the courts still apply the rule of Article 1062 of the RF Civil Code which says that, unless certain exclusions are present, legal claims arising out of games (and not just gambling games) are not enforceable at all.
- eSports: eSports were finally recognized as an official sport in Russia. Can someone claim her DotA 2 athletic title already? Not quite yet. The recognition of eSports means that, as a general rule, “ordinary” sports legislation would be applicable to eSports, and this area is quite [self-]regulated. Infrastructure is still being developed, and many organizational efforts have to be finalized before everything works as planned. But yes, the eSports recognition initiative has never been stronger and we may see more and more regional eSports federations (and, finally, one at the federal level) accredited by the Russian Ministry of Sports. Ultimately, this would mean official recognition of professional players and the possibility for them to get athletic titles. Although a specific DotA 2 athletic title is unlikely, considering specific games (and not genres) as disciplines, as discussed, could be unfair to others in terms of competition law. Therefore, a generalized discipline shaped in terms of a bureaucratized genre description could be more likely. But in other aspects, the general formal recognition already serves a few good legal purposes, including lowering the risks of various tournament reward structures being considered as implying elements of gambling.
- Taxation: It seems that Russia intends to apply VAT to foreign services. True? True. According to recent amendments to the Tax Code which came into effect on January 1, 2017, VAT shall be charged at the location of the purchaser of services provided electronically through the Internet, including granting of rights to use software and databases including the right to access computer programs (computer games are mentioned explicitly), provision of advertising, domain names and hosting services, access to search systems, IP telephony, rights to use eBooks and other content, online TV and radio broadcasting. This is intended to be applied also in cases where a consumer just provides payments from a Russian bank account, phone number or an IP-address. Foreign entities providing electronic services or intermediaries which collect fees from consumers will have to register with the Russian Tax Service even if they are located abroad.
Besides these genuinely legal practical problems, it is also important to take into an account the context of policy and social perception. For instance, as far as it comes to public morality aspects, besides universally accepted restrictions, such as criminal liability of child pornography and similar issues, modern Russian policy is to support traditional values. The Information Security Doctrine states that “the informational influence on the population of Russia, and first of all, youth, increases, in order to erode traditional Russian spiritual and moral values” (Section 12) and that such influence should be “neutralized” (Section 23). This policy approach may shape media attention, legal interpretation and enforcement, and even private perception of videogame products.
Alternatively, in addition to genuine moral values, Russian legislation is especially sensitive to the issues that can be summarized as “historical memory”. One of the strongest examples is that the period of WWII is considered as especially important for the Russian history. It was mentioned before that there is a special criminal law against intentionally wrong demonstration of the role of USSR in the Second World War, but controversies may arise even without interference of law. An illustrative example is the decision of the Russian publisher not to distribute the game Company of Heroes 2 (Relic Entertainment, 2013), made after a long and intensive public debate between videogame players, developers, experts and other participants caused by the fact that the narrative of the game provided a picture of Soviet Army that was rather alternative to the official one accepted in Russia.
“CoH2 manages to use almost every single Russia-related trope… Gulags, army without any weapons, Russians shooting their own soldiers in the back. By the third mission I was honestly expecting to see bear cavalry.” (Sergey Galyonkin). “Its critics say that while the Eastern Front did see unprecedented barbarism and cruelty, Relic has been selective in its narrative choices, preferring to ignore what people in Russia celebrate as a noble sacrifice that did more to save the world from Nazism than the American-led invasion from the West. In Russia and other former Soviet countries, the Great Patriotic War is about a heroic unified cause, not about repressive leaders throwing men against machine guns. The issue is complicated by Cold War myth-making by the Soviet Union and by Hollywood. Facts are obscured by a long, hostile political climate that has always sought to make claims on history.” (Colin Campbell).
This discussion occurred more than six years ago, before the rise of modern Russian information legislation. In current regulatory environment, it is advisable to be mindful of potential impact of the narrative on how the game would be perceived not only from public opinion perspective, but also from the legal one.
Returning to the starting point of this article, videogame law project did not succeed as a separate branch of law. Maybe, we will see the resurgence of its next wave as soon as virtual and augmented reality markets cease to be niche, and become such mass markets as, for instance, smartphones. We will see. In any case, irrespective of the current outcome, it would still be hard to argue that videogame industry poses some quite interesting legal problems, which already become quite relevant for practice. Such problems may not be related to complex contracts of sale and purchase of magical virtual swords or luxury space stations between users (work that some lawyers have always dreamed of). And, of course, there is a plenty of “old-fashioned” legal matters that videogame industry needs to resolve on a daily basis, such as corporate or taxation matters. However, there still is a number of problems that are dictated by the very nature of videogames that by nature present an unusual combination of intellectual property, content, and technology. This combination affects how the legal relationships develop in videogame industry and market.
- Benjamin T. Duranske, Virtual Law: Navigating Legal Landscape of Virtual World (American Bar Association, 2008). ↩
- Newzoo, “Russia Games Market 2018.” Newzoo.com. (accessed January 27, 2020). ↩
- Sidney Fussell, Why It’s so Hard to Stop Marketing Guns in Video Games. The Atlantic, August 19, 2019 (accessed January 27, 2020). ↩
- Appellate Ruling of Moscow City Court of November 10, 2016, Case No. 33-38783/16.↩
- The Federal Law of July 6, 2016 No. 374-FZ “On Amending the Federal Law ‘On Combating Terrorism’.↩
- Campbell, Colin. Polygon. “Why gaming’s latest take on war is so offensive to Russians”. Polygon.com (accessed February 28, 2019).↩