Written by Mark Chuah Chi Ming

The 1st of March 2021 marked the second session of an ongoing legal aid clinic aimed to discuss current legal issues in Esports and Sports law hosted by Mr. Richard Wee, managing partner of Richard Wee Chambers (RWC). In this session,  RWC was joined by Muhammad “Flava” Farouq. Muhammad Farouq, commonly known by his in-game name “Flava”, is a prominent figure in the Esports industry and a pioneer of Esports commentary  in Malaysia. With an illustrious career that started in 2012, Farouq now leads his talent agency ‘Flava Esports’ and was appointed the Communications Director of the Esports Malaysia Association.

In this discussion, speaker Muhammad Farouq poses past and prevalent alarming legal issues within an industry still in its infancy. This article will present a summary of the discussion between Muhammad Farouq and Richard Wee that explores key legal solutions to the perpetual problems of Esports contracts and an arising one in account theft.

Contracts

A heavily recurring problem in Esports brought up by Muhammad Farouq pertains to contractual issues with players not being paid their agreed salary or tournament winnings in a fair period of time. This is an issue that not only plagues the smaller tier 2 or 3 standards of teams but is also prevalent in major organizations. As an illustration, EPSILON Esports was exposed by players from various games in 2019 for withholding $16,000 of agreed wages in the player contracts. It is a wide scale problem that not only has implications on the high profile players, but also within the smaller scenes with up and coming athletes. Contractual conflicts can inflict severe damage on the  professional legitimacy of the community, and exploring how to combat it lies within the industry developing an understanding of legal matters.

“Esports has a history of poor contracts”, stated by Mr.Wee in response. The problem lies within the prescribed payment processes in contracts. In his experience, he observes that many contracts in Esports do not express a specific time or method of payment to athletes. At first glance, this may seem like an exploitation of the players. However, in his defence for both parties, there are many case laws upheld in court that if a timeline is not prescribed, the payment should be made in a reasonable time. But what classifies as ‘reasonable’? Mr.Wee proposes that a reasonable timeframe can differ from case to case, but should range within 7 to 28 days. Exceeding a 2 month period can warrant taking further action against irresponsible parties. 

Mr.Wee urges that players and talents seek a form of legal representation before signing contracts, as there are premium lawyers in this industry willing to help the community. 

In an industry where many of its key figures are young gamers excited to sign their first professional contract, investing in legal advice could be beneficial to their careers in the long run.

As a conclusive remark to the discussion of contracts, Mr. Wee highlights important details in a contract that should not be overlooked if players look to sign contracts individually. Firstly, it is important to verify the identities of the parties to ensure the contract will not be void. Secondly, as a reiteration; everything revolving payments should be clarified. Thirdly, a player’s KPI should be reasonably negotiated; and whether the level of expectation is realistic. Lastly, termination clauses should be checked for: what and when the clause can be triggered.

Reactions

The next point Farouq highlights is the reaction that proceeds a contractual disagreement, where it is second nature in this day and age for aggrieved opinions to be voiced out on social media. This prompts retaliation from organisers in most cases, claiming defamation against these social media posts. So what is the right course of action?

In reply, Mr.Wee states that social media is the first option for parties when a contract is breached. This is due to the fact that seeking other options such as turning to the police may be unsuccessful. Lodging a police report in the event of not being paid is a civil matter, not criminal. However, the first thing he advises is to express your concerns in writing to be sent to the responsible parties. But if your first option is to turn to social media, state facts. The law of defamation was intended to protect people from slanderous statements that can harm their reputation. Therefore, it is the best course of action to state facts and not excessively slander in order to abide by the technicalities of defamation.

Account Theft and In-Game Cosmetics

The stealing of an in-game ID through means of boosting ( players giving their account details for higher ranked players at a certain price to increase the skill level), hacking or scamming is uncharted territory for the industry. Mr. Wee asks an important question of whether ownership of these in-game IDs are an asset. 

In Valve developed games such as Counter-Strike: Global Offensive and Dota 2, in-game cosmetics are bought and sold within a community market valued with real currencies. The problem that arises in regards to account theft, is that losing an account could result in the loss of thousands of dollars in items. Valve has solutions for this: setting up support services to help community members recover hacked or hijacked accounts. Another safeguard measure is Steamguard (A Two-Factor authentication tool), where your account would be linked to a phone number. Despite this, losing your account to hackers and scammers is a common occurrence. As there is a lack of precedence in treating such accounts as assets within the law in Malaysia; there is an undeniable need for developing the law in regards to the theft of virtual items. 

Another area of concern regarding in-game cosmetics is with Valve itself. VAC is an anti-cheat system with the purpose to prevent hacking in-game through constant monitoring of any altered game files. If you are detected by the anti-cheat system, your account will lose the ability to play its games and also control of any purchased in-game items. The VAC is a successful system in many cases, however it does not come without any defects. There are multiple cases in the community of accounts being banned randomly by VAC, with players reporting over thousands of dollars lost. This is an issue that has not been adequately communicated by Valve in recent history. Although many professional Esports athletes have their false VAC bans revoked and explained, the regular gamer at home would not have that opportunity. Such cases should give an indication towards the need for legal recognition of virtual items with value. These items should receive the same level of other theft in civil law cases while gamers should be able to similarly claim damages as in any other case of physical theft.

Conclusion

Progression of the Esports industry has warranted much needed legal attention as many more niche issues arise and will continue to do so. Mr. Wee places importance on establishing Esports coalitions as the key to this industry moving forward. Organisations such as the Malaysia Esports Players Association (MESPA) are making positive waves in ensuring that the industry and its community will be protected. Malaysian Esports has doubtless potential; and it will look to its pioneers to nurture it and become a booming industry where e-athletes and common gamers will be protected.

 

Published on 22 March 2021

visit Us @ RWC:

NINE COURTNo 9, Jalan 22/3846300 Petaling Jaya, Selangor, Malaysia

Write To Us @ RWC:

justright@richardweechambers.com

Give us a call @ RWC :

+603-7890 4118

Whatsapp me:

+6016-275 0025
Subscribe to our Newsletter @ RWC
Always Get Our Latest News & Events Newsletter!