Model law on cross-border internet activities and virtual worlds

This model law boldly aims to regulate cross-border internet activities comprehensively, covering most their facets, including up to the level of complexity if “virtual worlds”. Our model law contains comprehensive lists of obligations for all actors from which legislators are invited to choose as appropriate. The model law also creates manifold interfaces with the national legal order into which it is to be embedded. Lastly, our model law establishes a system in which actors control each other as as to complement and even partly replace the work of enforcement authorities.

Download ML cyber relationships_virtual worlds

More and more aspects life are covered by the internet. This fact increases the number of relationships that arise between natural and legal persons. These relationships can arise via the internet in general, on platforms like LinkedIn, in internet games or in virtual worlds. The “metaverse” or similar “virtual worlds” aim to supplant the real world, creating even more complex legal relationships and encompassing ever more spheres of life, including professional contexts.

Where the natural or legal persons involved in internet relationships belong to the same jurisdiction/state, things are relatively easy: the domestic law applies. But what if the natural and legal persons live and operate in different jurisdictions and the platform owner in a third? Which law is applicable? How are the weaker persons in the respective relationships protected? How can the rights and obligations be enforced? These are just some of the many questions that arise with regard to international cyber relationships. Ever more legal questions and points to be regulated are emerging in the context of virtual worlds.

The goal of the model law is not to reinvent the wheel, but to describe a way to adapt the principles of international private law and the applicable national rules to the particularities of international internet-based relationships and to complement these provisions when needed. Therefore, we mainly suggest interface provisions that ensure the correct application and better functioning of international private law and the applicable national rules to the international internet-based relationships, including those in virtual worlds.

We also suspect that quite some national laws merit completion and clarification in view of the specificities of international internet relationships and virtual worlds. For example, the criteria determining whether a relationship is subject to social security obligations might not cover appropriately the situations in which the worker is located in another jurisdiction than the person commissioning the work, whilst the platform operates de facto from a third jurisdiction, but is legally based in a fourth.

Beyond the mere clarification, jurisdictions might also consider whether it is appropriate to formally withdraw or suspend the application of domestic law where the internet platform owner or virtual world owner has established an equivalent protection of the weaker party, e.g. by establishing an equivalent social security system. Such a step can be in the interest of all parties, including the jurisdiction/state, as we will see.

The Regulatory Institute is aware of the various piecemeal approaches of jurisdictions to regulate some aspects and types of internet-based international relationships. However, we consider that a more comprehensive and complete approach is needed to avoid numerous frictions and incompatibilities of national requirements. Moreover, a systematic presentation of aspects to be regulated could lead to a kind of informal harmonisation of national regulations.

However, the best possible way to regulate the internet will, in most cases, be to refer as much as possible to acts and provisions that apply anyway in the respective state and to modify these acts and provisions only to the extent necessary. Thus the act should primarily create an interface, a bridge. Such a bridge or interface act could pursue four goals:

  1. Clarifying the applicability of the rules already applicable to the internet context and rendering other rules applicable;
  2. Adapting and specifying all these rules to the specificities of international internet relationships and virtual worlds;
  3. Closing regulatory loopholes and addressing difficulties specific to international internet relationships and virtual worlds;
  4. Informing actors from abroad of these rules.

The last goal is important: economic actors and other actors from abroad who operate internationally have difficulties in identifying all the applicable acts and other rules in the various jurisdictions/states. Informing these actors is of utmost importance in terms of increasing the likelihood and the degree of compliance1. Evidently, non-regulatory means of information might also be appropriate.

1   In quite some jurisdictions acts may not contain provisions that merely inform. However, we suppose that most of the provisions below which refer to the rules already applicable to the internet context contain also an element falling under the cases A to C. Here, like for so many other parts and aspects of the following model law, we refer to the need for adaptation to the specific tradition and acts of the jurisdiction for which you work.

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