Gaming behavior with regard to computer games on the computer has changed considerably in recent years: Where floppy disks and CDs used to be the norm, sometimes in combination with obscure-looking copy protection measures (I fondly remember the Mix’n’Mojo hub at Monkey Island, which, incidentally, is also available online today), today not only downloads prevail, but also completely new gaming cultures, some of which have shifted entirely to the online realm.
Massively Multiplayer Online Role-Playing Games (MMORPGs) such as World of Warcraft have heralded a real cultural change in this respect – and also completely new legal issues: whereas people used to be most concerned about how best to copy games, today other desires prevail. At a time when accounts cost money and virtual goods have a real market value, cheating in games is viewed very differently. This is also reflected in recent court decisions. Lawyer Jens Ferner, who works in the field of software law, including legal issues relating to online games, provides an overview.
Legal assessment of accounts for online computer games
Your own account in an online game is of paramount importance, as your own scores and the character properties of the associated game character ultimately depend on it. If the account is blocked or even terminated, not only is any amount paid lost, but – what is regularly worse for the players – everything they have earned, in particular the virtual character with all virtual goods and acquired levels.
Contract law issues with computer games
Legally, there is a contract between the player and the game provider, which can be called a “gaming contract”. The interesting question is which of these are to be classified as GTC – with corresponding GTC control.
Rules of the game are not GTC
The Regional Court of Hamburg (312 O 390/11) has ruled that game rules do not qualify as general terms and conditions. This decision is easy to misunderstand, as it does not mean that the game provider can now freely and arbitrarily enforce unlawful terms and conditions. Rather, according to my reading and legal opinion, a distinction must be made between the “external” terms of use and the “internal” rules of the game.
In my opinion, the “Terms of Use” of the game provider can easily be qualified as general terms and conditions, which are subject to the usual legal review. This means that the game provider is by no means free to standardize what it wants here, rather there are limits. The terms of use concern, for example, the circumstances of “admission” to play. If, for example, a certain price is charged for an annual membership, an additional payment may not be demanded after three months due to a price increase. Ultimately, however, the possibility of review will depend heavily on how the user agreement is structured – free use will be reviewed less closely than paid use.
So it fits into the picture when, for example, the Karlsruhe District Court (8 C 220/12) wants to accept the contractual agreement of an option to terminate the contract at any time without cause in the case of a free game. This will not be so easy in the case of a paid contract. In any case, it will also be possible for the game provider to endeavor to prevent abuse. Likewise, there will always be a legitimate interest in preventing so-called “cheating”, especially as other players – who are not cheating – will quickly lose interest in the game as a result.
Dieses Interesse in rechtlich einwandfreien AGB umzusetzen, wird jedoch mitunter kompliziert sein, da zu unbestimmte Klauseln nicht verwendet werden dürfen. Der Anbieter muss insofern darauf achten, Missbrauchsklauseln möglichst konkretisiert zu halten, so dass es dem Spieler ohne Weiteres möglich sein muss, zu verstehen, welches Verhalten ihm konkret untersagt ist.
The rules of the game, on the other hand, i.e. the rules that govern the behavior of the players within the game, the virtual world, will regularly escape GTC control. The game provider will be free in this area and will be able to freely change and adapt the “rules of the game” as it sees fit.
Sale of used computer games is permitted
The sale of computer games and console games, at least if on a data carrier, will be possible in principle. Both the Federal Court of Justice and the European Court of Justice have established groundbreaking case law in this area, which leaves no doubt as to the fundamental permissibility of reselling on a data carrier – although this is the case with regard to downloads or the isolated sale of activation keys. The sale of user accounts and online access (such as with Steam) is also not necessarily legally possible. The permissibility of selling used computer games is explained in detail here in our German-language blog.
But: No sale of user accounts
The Federal Court of Justice (I ZR 178/08) has now ruled that it may be permissible to prohibit the resale of user accounts in general terms and conditions. Specifically, this concerned the problem that a game is linked to an account and the (possible) sale of the game on the data carrier is worthless if the account cannot be sold as well. (Note: It will now also be possible to trade in used online software, see the decision of the European Court of Justice here).
The terms and conditions read: “You are prohibited from selling your user account, charging money for its use or passing it on in any other way.” The wording “The transfer of a personal account or individual game characters to third parties requires the prior written consent of …” was approved by the Charlottenburg District Court (208 C 42/11).
And also no sale of virtual currency or virtual goods
The Higher Regional Court of Hamburg (5 U 168/11) prohibited an operator from operating an online forum that encouraged unauthorized trading (i.e. in violation of the general terms and conditions of a gaming operation) with game currency or virtual items from the game.
Right of withdrawal for the purchase of virtual goods
A special feature applies to consumer law in Europe: Due to the EU Consumer Rights Directive, there is a right of withdrawal for distance contracts (see Section 356 BGB). This now also includes a contract for the supply of digital content if the consumer can download digital content (so-called download contracts) or if this content is made available to him in any other way, e.g. through access to an online computer game. However, according to the decision of the Regional Court of Karlsruhe (3 O 108/21), it is possible to prevent such a right of withdrawal by placing an online order in a game with confirmation via a checkbox with appropriate wording.
Right of termination in the event of match cancellation?
Numerous games can (only) be played online today, especially MMORPGs. What about the right of termination if such a service is unavailable for a longer period of time? One provider wanted to grant itself a 72-hour grace period – and lost before the Berlin Regional Court (15 O 300/12). This is because, the court correctly stated, even constantly recurring short-term outages, as well as frequent announced long-term outages, can constitute grounds for termination for good cause.
Right of termination in the event of match cancellation?
Numerous games can (only) be played online today, especially MMORPGs. However, what about the right of termination if such a service is unavailable for a longer period of time? One provider wanted to grant itself a 72-hour grace period – and lost before the Berlin Regional Court (15 O 300/12). This is because, the court correctly stated, even constantly recurring short-term outages, as well as frequent announced long-term outages, can constitute grounds for termination for good cause.
Cheating & Bots!
In online games, so-called “bots”, i.e. computer programs that carry out actions independently, can literally be worth their weight in gold. In quite a few games, “items”, especially virtual gold or other virtual goods, can be generated, which can later be traded on platforms such as ebay and thus generate real money. Bots” can be used to try to automatically generate and exploit such goods – it is obvious that the game operators have no particular interest in this.
Use of bots can be prohibited
The Charlottenburg District Court (208 C 42/11) had already decided early on that both the prohibition of “bots” through general terms and conditions and the termination of the gaming contract by the gaming provider based on this did not raise any legal concerns. The court was satisfied with the proof of the use of bots in that the provider
- Proved that a large number of accounts were not only used by the same IP, but also MAC address (identifier of the network card), as well as
- a large number of the affected accounts stupidly tried to run through suddenly appearing objects when the game characters were moved (simple test, bots are stupid: they more or less always run on fixed routes…).a large number of the affected accounts stupidly tried to run through suddenly appearing objects when the game characters were moved (simple test, bots are stupid: they more or less always run on fixed routes…).
The court rightly recognized the use of bots as a generally valid important reason for termination (according to §314 BGB). According to the court, the game provider can no longer reasonably be expected to adhere to the contract when using bots: The circumvention of paid services associated with the use of bots “disrupts the balanced game structure, which only works if the game participants behave in accordance with the rules; it carries the risk that other, honest users who pay for the additional services will be driven away, which in turn threatens the financing and thus the existence” of such games, while there is no apparent special need to protect the use of such bots.
In this case, the T&Cs read: “The user is further prohibited from using the online game in a way that is not intended by …. In particular, the user is prohibited from […] using or distributing software that changes the gaming experience or gives the player an advantage over other players (in particular cheats, tools, bots, modifications and/or hacks)”
This can now be seen as established case law, and the use of bots is viewed critically across the board, partly because it jeopardizes the business model of game providers:
The bots at issue, however, profoundly change the game concept because they turn the basic idea of the game to mobilize the user into its opposite by making it possible to play from home. The plaintiff does not have to accept such a radical intervention in the game concept. The illegal use of bots is also likely to cause annoyance and disappointment among honest players about the illegal use of bots and is likely to cause them to turn away from the game. It is understandable and in line with life experience that players lose interest in a competitive and cooperative game in which they cannot compete with other players under the same conditions and cannot make moves together as intended (see BGH, judgment of 12.01.2017, I ZR 253/14 – World of Warcraft II, juris, para. 82).
Landgericht Köln, 14 O 38/19
Problem: Providing evidence of cheating and bot use
However, it is often difficult for the game provider to prove abuse – apart from the cases above, where someone uses a large number of accounts. In the case of a single account, the individual, specific behavior must prove why abuse (bot or cheating) should be present. The burden of proof is on the game provider if they wish to derive positive consequences from this.
The Higher Regional Court of Cologne (19 W 2/10) has correctly recognized in this regard that it will not be possible for the game provider to prove the existence of unauthorized additional software on the computer of the respective user at the time of the alleged infringement (due to a lack of access to the computer of the excluded user). Nevertheless, it is incumbent on the game provider to at least provide concrete circumstances that suggest such an inference and not be limited to vague assumptions or suspicions. In the case of a first-person shooter, for example, jerky movements are not necessarily an indication of unauthorized additional software!
Offer of cheating solutions
The providers of such bot software should also be careful – as the Hamburg Regional Court (legal ruling on this here) has shown, game providers can obtain injunctions against the creators of such bot software with regard to distribution! This is because the court found that the provider of an online game does not have to tolerate third parties offering bot software (which is not permitted under the rules of the game). This results in a competition law claim for injunctive relief from Section 4 No. 4 UWG (formerly: Section 4 No. 10 UWG). The court points out:
On the one hand, the reputation of the game is affected if players are disappointed or annoyed because other players are playing with the support of a bot.
In addition, the game allowed players to buy and resell virtual items for money. Here, too, the court considers this to be detrimental to the attractiveness of the game, as interest in the game decreases when others earn items through automatic game aids. This raises the aggravating question of whether cheating software interferes with the existing copyrights of the game provider. The Federal Court of Justice has referred this question to the European Court of Justice (C-159/23), so an answer can be expected from there at some point.
Advertising in computer games: Forced advertising and children
The decision of the Berlin Regional Court (103 O 43/10), which found that advertising shown before the start of a browser game and which cannot be skipped is generally inadmissible, is somewhat disconcerting and has been widely criticized:
If interstitials cannot be terminated prematurely, the user is forced to wait until access to the page actually called up is enabled. The only way for the user to avoid the advertising is to leave the page by closing the browser window. This is unacceptable even if the interests of the defendant are taken into account.
The court based its decision on the fact that there are also free sites without advertisements. The reasoning may still not be convincing, it remains to be seen whether a line will develop in case law or whether it will remain a (questionable) individual case decision.
In any case, if children are part of the target group, caution is required when it comes to advertising: If advertising is formulated in such a way that children feel – impermissibly – addressed and encouraged to buy, which can already result from the payment option via text message, this must be refrained from (BGH, I ZR 34/12). With the BGH’s ruling, a complete ban on advertising to children may have been issued – which can only be assessed once the reasons for the ruling have been published. At the time, the Court of Appeal (5 U 84/12) had still spoken out against a comprehensive ban on advertising to children. However, it rightly demanded a very clear marking of advertising and provides further explanations on this, which should be kept in mind for the time being when designing:
Compared to adults, children (especially if they are only seven years old or barely older) generally have weaker attention and reading skills, but on the other hand a stronger play instinct, which is particularly susceptible to “moving images” (as here). This must be taken into account in the case in dispute, which is why the defendant should be required to point out the commercial nature of the advertising in question much more clearly and in a more child-friendly manner than was done here.
Similarly, the Cologne Higher Regional Court (6 U 132/12), which did not consider an advertisement of up to 10 seconds (pre-roll) in a game aimed at children to be problematic.
Taxation of online winnings
In principle, privately generated winnings from real gambling are not subject to taxation in Germany. However, there are exceptions.
A particularly important exception are winnings from online poker games (e.g. in the “Texas Hold’em” variant), which may be subject to income tax as income from business operations (see Federal Fiscal Court, X R 43/12, III R 67/18 and X R 8/21). According to case law, the distinction from private activities required in this respect for players – as well as for athletes – depends on whether the taxpayer satisfies private gaming needs with their activity like a recreational or hobby player or whether structural-commercial aspects come to the fore in an overall assessment. The decisive “model of the professional gambler” in this respect is primarily determined by the planned exploitation of a market using “professional” experience, which must be assessed in each individual case.
Another underestimated risk is profits made in the form of “foreign currency”: if these are exchanged for other currencies within a year of receipt, the exchange process can result in a tax charge!
Conclusion on legal issues relating to computer games
Online players are well advised to know and follow the basic rules of their provider. At least in the area of actual abuse, you can expect the courts to take the position of the game provider as long as the terms and conditions are defined in such a way that a consumer can actually understand them. In the case of cheating and the use of bots, courts will certainly always grant a special right of termination, as the provider’s business and gaming model is significantly jeopardized.
Note: In our law firm by specialist lawyer for IT law Jens Ferner we represent the creative industry in the field of software law – especially game developers and software houses. No activity for consumers/private individuals!
Our law firm specialises in criminal defence, white-collar crime and IT law / technology law. Note our activity in digital evidence in IT security and software law.
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