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Virtual Reality – Legal Issues

David Anderson is a real solicitor advising in a virtual world.

Virtual reality (VR) is starting to become a real reality. It will soon be adopted by all sorts of businesses as a way of interacting with customers. It will have the same impact on business as the internet. Early business adopters may get a huge advantage over other slower adapting businesses. The law is way behind on this and a few issues are highlighted here.

  • What does the business own? The software allowing VR will almost certainly be licensed to the business and will be similar to most software licensing contracts. The terms of this agreement will need to be looked at carefully. What can the software be used for and in which markets? How will it be updated and customised. A commitment to ongoing development is key with a cutting edge product like this.

  • What are the terms and conditions of use? When customers walk into a shop and start trying on clothes they do not sign any agreement. Over the years the business owners obligations to provide safe premises and safe clothes for instance has been worked out. This is all new with VR. Who is liable if the VR showed the clothes being modelled on a cat walk with flashing lights which medically affected the customer? What happens if the customer experiences a panic as a result of the VR and falls over and is injured? What happens if the customer does not like the experience and wants to leave the virtual shop but cannot do so?

  • Data protection. The VR may gather personal information in order to prepare the VR presentation. For instance a customer’s body shape and size may need to be scanned and measurements loaded into the software to generate a virtual person like the customer. Who owns this data, how can it be used and when must it be deleted. In a virtual world the customer’s reactions to products can be recorded such as laughter, pupil dilation and similar which tells you what they like and dislike. Can you record this and how can you legally use it?

  • Buying. If the client buys from a virtual shop assistant is this any different to buying on line. In this case the client may use a virtual credit card which has been preloaded onto the software and then (virtually) tap the terminal. Is this virtual sale going to be a valid sale?

  • Shoplifting. Could the customer shoplift or commit any similar offence in the virtual shop? If so do you sanction this? Does the software not allow for this or any other anti-social behaviour on your virtual premises?

  • Interaction with sales assistants. Do you want virtual sales assistants in the virtual shop? If so what should they look and sound like. Do you let the customer choose the kind of virtual sales assistant they want to help them? Do you want a “comic” character as a sales assistant?

  • Interaction other shoppers. Should the software allow customers to see other shoppers on your premises also in VR? If so should the software allow them to talk to each other? Will this strengthen or damage your brand?

  • Middlemen. Could VR kill off part of your business? If you are a distributor in say the UK for a foreign company’s products could VR mean that the foreign company sells direct in the UK without your involvement?

  • Service companies. How will this affect professional and similar services? Will at least part of the sales processes they offer be provided using VR? This seems quite likely say for holiday companies offering prospective customers a VR walk through of hotel accommodation and even entire resorts. Accountants providing business start-up advice could have VR packages for different kinds of businesses.

  • Challenger VR businesses. Traditional brick and mortar and even internet type companies which are vulnerable to VR are likely to include; clothes retailers, financial service including insurance companies, car sellers, education providers and travel agents. It is always difficult to predict where technology will go and how fast.

June 2018

David Anderson

Solicitor-Advocate and Chartered Tax Adviser