Esports Exploration: Top Five Legal Disputes in Esports
When looking at how the esport industry developed, we observe that it has been and is still mainly driven by the community itself. Passionate gamers developed a complex environment meant for passionate gamers, without taking into consideration an influential legal factors most are not experts in this domain. With the explosion of the esports market and the increasing amounts of money involved, numerous legal disputes and scandals have occurred. This article discusses typical legal issues that can be found in esports, and compiles five legal disputes that have happened so far and describes how these laws need to adapt to fit this specific environment.
What makes legal matters hard to handle in the esports world? What are some specifics and banalities that characterize legal disputes in esports? Here is a list of issues that fall under the esports umbrella. This list was compiled by Andrew Nixon, Daniel Geey and Jonny Madill for the website LawInSport.com on 09/02/2016: https://www.lawinsport.com/features/item/an-overview-of-esports-explosion-and-legal-issues -arising-from-it
· The issue of players’ rights and the formation of an overarching player union (including the provision of minimum player contract terms);
· As betting markets develop,integrityissuessuch asmatchandspotfixing, use ofinsider information and in-game cheating will come to the fore;
· Salary caps, cost controls and salary transparency;
· The collective distribution of commercial and broadcasting monies amongst teams and players; · Disciplinary matters and stakeholder disputes;
· The creation of robust governance and regulatory frameworks (a functioning governing body, or set of regional governing bodies);
· Doping(specifically in relation to cognitive enhancement substances which help players stay responsive and alert for longer periods) will become headline news;
· The need for contractual stability for players and teams, and issues surrounding player inducements/ poaching.
Top five legal disputes that occurred in esports
This top five does not represent in any way the biggest legal disputes that have happened in esports, it only compiles five that are significant. Also, this article does not go into any details about these cases, nor does it intend to provide any opinion about the final judgement.
1. SpectateFaker case (LoL) : A streaming and copyright dispute
`Faker’ is a Leage of Legends (LoL) player who posts his gaming content on a platform called `Azubu’. `SpectateFaker’ is a Twitch channel that posts videos of Faker playing, meaning that Faker can be watched on both streaming platforms. Azubu filed a complaint against Twitch claiming copyrights to the SpectateFaker channel. Azubu pays a lot of money to Faker to post on their platform, therefore they sued the two other parties claiming they are stealing content that belongs to Azubu.
This is a classic situation in which a player gets ‘streamed’ or broadcast by another individual. This means that the video content is used by someone else and published on different platform than is normally intended. This dispute is not over yet, but according to the Viacom case (see point 2. below) Twitch cannot be held responsible for copyrighted content shown on their platform. The only wrongdoing that can be found from SpectateFaker would be the use of the name Faker in order to promote the channel. From Riot Games’ perspective, SpectateFaker is allowed to use LoL images as he intends to and is not crossing any legal boundaries.
2. The Viacom case: A reference in copyrights issue
Between 2010 and 2014, the Viacom case occurred and is now used as a reference in similar situations. This case was dealing with a copyright dispute between Viacom and YouTube. The first company was claiming more than a billion dollars from YouTube, because several videos that belonged to Viacom (like Sponge Bob and The Daily Show) ended up on YouTube and generated a total of around 1.7 billion views. The court decided that YouTube was not responsible for the leaks or publication of copyright protected content, due to the massive amount of videos posted every day. As long as YouTube tries to prevent it to happening and makes sure to delete videos that have been reported as violating copyrights, the company has done its its due diligence and cannot be held responsible. Finally, Viacom was suspected to uploaded all the videos themselves on YouTube from several different locations. Viacom was even encouraging people to watch them on YouTube in order to support their arguments during the court trial. They lost the trial in court and this case is now widely used as a judgment reference for other similar cases in the esports industry.
3. Team Secret scandal (Dota2) : Players rights and payments issue
The Dota2 scene was struck by a team scandal back in 2016 in which Team Secret was involved. The players of the 2016 rosters claimed they were not being paid what the organization had promised. They did not receive the earnings from tournament winnings , and they had never signed a contract. Moreover, Team Secret took a 10% cut on all earnings without mentioning this to its players. Even though this case is far from being an exception, the fact that the players openly spoke about it on social media created a real sense of indignation amongst the Dota2 community. Team Secret, which had had a pretty clean image, suffered from being hammered on social media, an example that the other Dota2 teams did not want to follow. This case underlines a very common legal issue in esports: the lack of laws protecting the players and the weak legal context surrounding professional gaming. The status of ‘professional gamer’ or ‘esports athlete’ does not exist in every country yet, which means that many players are never able to benefit from legal protection that such recognition could provide . A contract defines what the legal rights and obligations are between two parties, normally once party paying the other in exchange for services defined in that contract. At the current level of competition and organization, this is a serious issue that is abused a lot by team owners, and it applies to every game in the industry.
4. Dota2 vs LoL dispute: The war for MOBA
This dispute is maybe one of the most thrilling stories the world of esports has ever seen. It concerns the two biggest Multiplayer Online Battle Arenas (MOBA’s) currently played; League of Legends and Dota2. To understand the dispute, one needs to know how both games became incredibly popular. The image below presents the history of the MOBA genre and how the different games developed simultaneously.
The development of these games happened in a rather dramatic way. Guinsoo, the developer busy working on LoL, had been accused of stealing all the ideas and concepts developed by the DOTA All Stars community. Indeed, since the game was run by passionate gamers, all the ideas, codes, programs and data were gathered on the official game website. However, while the leaders of the community were having problems with each other, the website shut down and was not accessible anymore. On the main page you could only read an advertisement mentioning that people could soon enjoy playing a better version of Dota: League of Legends. What happened is unknown but it is assumed that all the ideas presented on the website got stolen and used to create a new MOBA. When the website reopened, all the data was nowhere to be found and the entire layout had changed. At the same time that LoL was being created, Icefrog (who is another key programer from the DOTA community) was busy creating Heroes of Newerth with another company. He later took a prominent place at Valve when they bought the rights for Dota2. Whether it is Dota2, HoN, or LoL, they all come from the same game and have been created by the same group of people. Therefore, it has been really hard to define who had the right of ownership on the MOBA genre. In 2012, Valve and Blizzard resolved their legal spat over the DOTA trademark. As part of their agreement, Valve was be able to keep the title DOTA 2 for their upcoming strategy game. Blizzard then changed its mod name to Blizzard All-Stars and both companies left in good terms.
5. Illegal gambling in CS:GO: Underage gambling
In 2016 an American gamer filed a complaint against Valve claiming that the company was encouraging illegal betting amongst young audiences. The issue was raised after many underage players lost a lot of money in buying, trading and betting CSGO in-game items and cosmetics. It has been discovered that some streamers would promote betting websites by showing themselves winning large amounts of cash, without disclosing that they were the owners of these websites. When the scandal came to light, Valve started a large-scale operation, banning players and websites even though the company was going to lose millions of dollars in item trading as a result. Esports are mainly attracting young males aged between 16 and 30. Young audiences are more vulnerable and need more attention in the way they are protected. These scandals shed light on issues in esports, helping legal solutions to be created faster, but they also show how ready people are to make money by taking advantage of young gamers. The esports industry is very behind in terms of underage protection and a lot of efforts still have to be made before companies are prevented from exploiting their young male audience.
When looking at all these cases, there is a common pattern that could be identified. In my opinion, esports suffer from an interesting paradox: it is a community made environment and it is very attached to this value. However, esports are now a multi-million dollar business yet it is largely community driven and run by passionate gamers. Esports seem to have been deliberately left to their own rules so that businesses could freely do what they wanted. I think that this paradox causes many legal breaches which some people understand very well and use for their own profits.
- https://www.polygon.com/2016/6/23/12020154/counter-strike-csgo-illegal-gambling-la wsuit-weapon-skins-valve
- https://www.polygon.com/features/2016/7/18/12203534/counter-strike-cs-go-skin-ga mbling
- https://www.lawinsport.com/features/item/an-overview-of-esports-explosion-and-legal -issues-arising-from-it
- https://www.cinemablend.com/games/Blizzard-Valve-Settle-DOTA-Lawsuit-42430.ht ml
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