Digital Ownership: A Legal Reflection

As technology advances, transforming artistic expressions like games into vast databases has sparked debates on issues such as corporate control, contractual justice, and consumer privacy concerns regarding modern digital users.

The Nature of Digital Ownership

The shutdown of an online game renders its content inaccessible even after purchasing rights, which conflicts with the contemporary notions about property in technology. When an individual assumes ownership of a durable item but realizes it was actually leased as part of a digital service reliant upon internet connectivity, it raises an important inquiry about whether actual ownership extends beyond tangible possessions when something has been granted under specific terms? Under Indian legislation, its governing authority is to be found embedded within the provisions outlined in the Sale of Goods Act, 1930. Under this transaction, possession of a good is exchanged between the vendor and purchaser for control over the good.

Nevertheless, digital items occupy an ambiguous position as they do not entirely qualify as either tangible commodities or intangible offerings. In Tata Consultancy Services vs. State of Andhra Pradesh case [2004 INSC 643], the Courts acknowledged that computer programs could qualify as “goods” when they meet certain criteria, which are: capable of being isolated, capable of being sold separately, and capable of being traded like tangible items. Under certain conditions, this viewpoint treats video games and software as commodities despite their ambiguous nature.

For consumers in relation to The Crew game, the grievances primarily concern the payment for access rather than actual possession of an item. In Indian legal systems, judges might examine the provisions of the contract and deliberate upon whether they were adequately transparent and finally ensure that adequate protection exists to safeguard the interests of the consumers. In situations where there is uncertainty, the Courts generally prefer to construe the contractual provisions in such a manner as to favour the offeree (generally, the weaker party), an approach which aligns with a well-known legal doctrine that is widely recognised by the Indian Courts, namely the Doctrine of Contra Proferentem.

The Doctrine of Misrepresentation and Unfair Trade Practice

Yet another facet that merits careful consideration is that of engaging in unfair trade practices. Should a vendor market something for sale without informing consumers about its impending disappearance due to system shutdowns, such conduct may be deemed to be deceptive and may be considered to be akin to false advertising. Section 2(47) of the Consumer Rights Law, 2019 delineates an unfair business tactic encompassing deceptive marketing communications about product authenticity and durability. Should a product be presented in the garb of permanence while being crafted for eventual obsolescence, it might deceive its audience about its true nature. Under this law, both district and state consumer protection bodies have authority to deem certain services unsatisfactory and such bodies may request restitution, monetary awards, or penalties for violations of their standards. Additionally, the principle of caveat emptor is less stringent under Indian laws today as it now favours the buyer more prominently whenever technical intricacies of the commodity may obscure consumers’ comprehension. Therefore, when faced with these circumstances, firms similar to Ubisoft must be more accountable for sharing data so as to ensure that the customers comprehend the restricted aspects of what they are buying.

The Doctrine of Frustration and Failure of Consideration

If an acquired software fails because of user error rather than manufacturer’s negligence, this might render the agreement nullified. Section 56 of the Indian Contract Act, 1872 defines the concept of frustrated contracts. The said provision indicates that a contract ceases to be valid if it cannot be fulfilled because of circumstances that lie beyond the control of the party who is bound by such contract. In India, the Courts, acknowledging these differences, might decide that terminating an agreement is not a genuine frustration of the contract but a deliberate action which results in a violation of terms. Consequently, the aggrieved consumers may legally pursue compensation under Section 65 of the Act.

An accord between freedom in contract negotiations and consumer protection justice

In many cases, India’s legal system tends to weigh the significance of agreements against the principles of justice. When such situations arise, the Courts typically consider what people reasonably anticipated in similar circumstances. Despite having control over ending digital offerings, businesses should exercise this authority responsibly without engaging in unfair practices. The terms of agreements must uphold rationality and honesty. Ultimately, should Ubisoft be subject to legal scrutiny under Indian laws, the Courts might institute queries into whether or not the consent of the customer was obtained through fair means; whether or not the firm was deceptive in its conduct; whether it is time for the laws to adapt so as to protect digital possessions in the same way as objects which are tangible, and so on.

The End-User License Agreement

Despite being generally accepted legally across many countries, this form of electronic agreement sparks significant scepticism within India’s legal framework due to its requirement for genuine freedom and clarity in consent, stipulated by Section 14 of the Indian Contract Act, 1872. For long the Indian Courts have emphasize that standardized agreements signed by parties of unequal bargaining strength warrant a careful scrutiny due to their inherent imbalance of rights and obligations. The Court, in L. I. C. of India v. Consumer Education & Research Centre [1995 SCC (5) 482], ruled that provisions deemed as unfair, biased towards one party at the expense of others, or contrary to societal norms could be invalidated according to Section 23 of the Indian Contract Act, 1872. In relation to online gaming, this concept assumes heightened significance. A license agreement permitting publishers to terminate usage rights, erase player information, or disable in-game purchases for no legitimate reason could be subject to significant legal scrutiny. According to Section 49(2) of the Consumer Protection Act, 2019, consumers can challenge certain deceptive clauses by having them declared to be null and void. The vast majority of End-User License Agreements tend to favour corporations by including numerous provisions designed to shield companies from liability, thus often serving as obstacles to the consumers’ rights. In these instances, individuals could argue that certain contracts appear excessively biased or morally wrong due to their terms regarding immediate dissolution without prior warning; consequently, when faced with a situation akin to what happened at Ubisoft, an Indian Court would likely decide that all clauses permitting abrupt terminations should adhere strictly to fair procedures accompanied by adequate notification periods, otherwise they may be deemed legally void. To summarize, the Courts may rule that contracts based on coercion lack validity, asserting that genuine agreement requires clear comprehension by both parties.

Conclusion

Despite its origins within video games, this issue represents an underlying shift in legal norms. These regulations compel one to reflect on their sufficiency and effectiveness for safeguarding the consumers’ rights within online commercial environments. A digital goods code which would ensure fair transactions by safeguarding consumer rights against ephemeral content being merely rented rather than purchased may be imperative. Within today’s burgeoning online economy, stability appears superficial for true possession seems to rest upon precarious underpinnings of trust. Consequently, existing legislation needs to evolve to address these contemporary weaknesses in order to ensure fairness amidst technological advancements.

Author: Chinmay Nayak, in case of any queries please contact/write back to us via email to [email protected] or at IIPRD.