by Giulio Coraggio, Vincenzo Giuffrè and Micaela Jerusalmi

The Esports market has been booming over the last years and the recent Covid-19 strict regulations impacting the sports sector and imposing social distancing have greatly increased the focus on Esports competitions so far. Even with this scenario, the legal challenges for global Esports online platforms and tournaments still remain underestimated by regulators. The persistent lack of a comprehensive regulation may indeed be perceived negatively by Esports’ tournament organizers that need to struggle against the increasing phenomenon of cheating.

The advent of online computer games and esports tournaments changed how people can cheat (e.g., identity theft, phishing, eDoping, etc.): there are new ways of cheating and entirely new legal problems caused by the violation of e-tournament rules. Cheating can lower game traffic, revenues, and ruins the overall gaming experience for players causing potential reputational damages. In this regard, publishers, developers and Esports tournaments organizers must be well prepared from a legal standpoint to prevent unauthorized use of their software and to privately enforce the rules that govern the participation of players in Esports competitions.

Cheating as a breach of the Esports tournament official rules

When an Esports tournament is part of a league, the event is not a mere promotion, but the performance of the business itself and may be considered, if properly structured and under specific circumstances and depending on applicable laws, exempted from the application of prize promotion regulations.

In this view, leading organizers of Esports tournaments are allowed to independently:

• draft the rules for participation in a tournament, which include the provision of sanctions against players and teams whose behavior may be framed as unethical or illegal; and
• enforce the relevant contractual provisions (if any) as set out by the T&Cs of the tournament.

Sanctions may be imposed depending on the seriousness of the violations. For instance, Esports tournament organizers may impose minor sanctions ranging from a deduction of points or termination of the game, up to more serious sanctions such as disqualification from the tournament or a permanent ban on participating in that or other tournaments.

Cheating as an infringement of copyright

Generally speaking, software can enjoy copyright protection, and so attribute to the owner the exclusive rights to exploit the work and the moral rights to be recognized as the author and to prevent others from spoiling the work. Under Italian law, videogames may be protected under copyright law both as a work of art and as a software.

Having regard to this second kind of protection, cheating may constitute a violation of copyright, since fraudsters use tools in order to alter the software or create copies of the source code before or during the game, without any authorization from the right holder and so infringing the economic rights of the owner. Moreover, cheating may be seen as an infringement of moral rights too, given that especially in the context of a tournament with several participants and an audience, the honor and reputation of the videogame creator may be damaged as a consequence of the infringement.

Copyright infringement allows the owner to receive compensation for damages in court. So most of the times, the tournament organizer will have the right to seek compensation for damages against the fraudulent players. Nonetheless, court proceedings in these cases could turn out not to be cost effective. Even though the ordered compensation could be satisfactory (also taking into consideration the damage to reputation suffered in front of the audience and of the participants of the tournament), time and costs to be spent in the proceedings could still not be worth it. And so, to use a common expression, prevention is better than cure.

As said, in the context of an Esports tournament, players are bound by the tournament’s T&Cs. In order to limit the chances of an infringement, such document should include clauses on the lawful use of the software and the prohibition to alter its source code, or to create copies of it as it may occur when bad players try to cheat. Another clause could provide for a broad prohibition of any act that may damage the creator’s reputation, making it clear that any act of this kind could lead to liability for the damages caused by the player.

Maximizing enforceability

Summing up, well-drafted Terms and Conditions may constitute an effective response to cheating at videogames, creating a disincentive to engage in such behaviour. Clearly, in order to be able to play this role they must be enforceable.

The Esports organizer who intends to set up a competition outside its own country should be aware that no standard version of Terms and Conditions can be expected to hold up around the world. Actions that needs to be taken on the key markets include adaptation, localization and translation to domestic languages, since the player cannot be bound by something he does not actually fully understand and/or is expressly forbidden by the Country applicable regulation.

Should a court find the Terms and Conditions unenforceable against a player who won the prize value, this may create a dangerous precedent regarding contractual obligations in computer games. The risk is that if courts start declaring clauses or the whole T&Cs invalid, they will somehow lose their legitimacy and subsequently be ignored. As a consequence, the instrument will be deprived of its ability to affect bad players participating in Esports tournaments in the desired way.

DLA Piper launched its ‘Esports Laws of the World’ guide which covers regulations of 38 jurisdictions and it may provide a valuable reference tool for Esports practitioners either investing, or looking to invest, in Esports aimed at flagging potential issues and identify possible solutions from a national market standpoint.