|Gamification and Law or How to stay out of Prison despite Gamification|
|Written by Mario Herger|
|Tuesday, 03 January 2012 21:55|
Now that gamification is turning from an obscure to a strategically important concept in the corporate world, it becomes necessary to look at the legal aspects of gamification. Especially for global corporations, but also for smaller ones, there are a surprising number of regulations to consider. Labor laws, data privacy, banking laws, but also basic constitutional rights can be pretty quickly violated through sloppy a gamification implementation and result in severe punishments. Let's take a look at some of these areas.
Applying gamification inside a corporation or on interorganizational transactions (B2B), where employees of organization (have to) interact with a gamified system, generates - due to the nature of the concept - a track record of the achievements of employees. Calculation of leader boards (employees ranked by achievement points), the display of badges, the creation and acquisition of virtual currency or virtual goods - which under certain circumstances can be exchanged to real money – or the earning of other benefits, like additional vacation days, the possibility to win prizes etc. do require in countries with strict labor laws and strong labor unions the approval of a workers council.
For example in Germany labor laws provide a legal framework, which can be filled by the an explicit agreement between the workers council and the organization. How much control an employer may exert, is not so much derived from the laws, but from the interpretation of the laws through jurisdiction. The constitutional principal of proportionality requires, that an employer can only restrict the liberty of an employee's right to personal development to the extent which is required to the need of the organization. And it has to be mentioned that jurisdiction in Germany has been traditional interpreting law in favor of employees.
Worker's councils regard data collection, as it is achieved through gamification, with the following questions (amongst many more considerations):
A manager may use the data from such approved systems to make performance reviews. But not anymore, as soon as the collection, manipulation and use of employee-related data is neither necessary nor in proportion to the use.
Data privacy law
Data privacy in Germany regulates and forbids the collection and use of personally identifiable data, unless it is explicitely permitted (as described inthe German federal privacy law §4 BDSG; the rest of that law lists the permitted exceptions). The detailed application of co-determination-relevant topics is then task of the involved parties (workers council, board), of course within the legal frame.
Law firm Pillsbury Winthrop Shaw Pittman LLP has been addressing at the past Gamification Summits a number of legal restrictions and challenges in regard to virtual currencies and assets, with a focus on US law (see the video below with James Gatto: Gamification Law: Formula for Success).
The main discussions and the applicable laws and regulations circulate around these four questions:
Just as an example: if a virtual currency was bought through cash payment with a real currency, such a transaction and the after effects need to comply to the CARD Act (which regulates gift cards and others). This law basically specifies how a corporation can use the money after expiration date (in many states the money is escheated to the state), when the value can be used as revenue in the balance sheet, if periodic service fees are permitted and what the amount of them can be, who can redeem the amount and if and when that can happen in cash etc.
The operators also need to consider strict regulations around the record storage (there are minimum requirements), building cash reserves, money laundering (USA PATRIOT Act), as soon as a virtual currency can be exchanged between users residing in different countries, currency exchange etc. Under certain circumstances a banking licence may be required to offer virtual currencies. And since the economic crisis from 2008 a number of even stricter regulations wereintroduced to offer more consumer protection and regulate providers of financial services.
Furthermore, gambling laws and the state monopoly on them may be applicable. Pillsbury describes more of that and in more detail.
Additional laws and regulationsBeside those big junks there may be other ones, depending on the countries your users are located and accessing your gamified systems, that need to be considered. Germany for examle has one regulation about Safety and Health Protection at Work in front of a Monitor.
Punishments can be severe and are not treated as small crimes. Understanding the legal aspects of gamification is necessary. But whatever you do as operator of gamified systems (and I quote the Pillsbury lawyers), you need to strike the balance between the right user experience and business opportunity, by protecting the asseds and users and avoid liability. But isn't this the moment, where gamification starts to become really interesting?
Interested? If you are interested in learning more about legal restrictions in regards to gamification, I will do a deeper dive in my upcoming enterprise gamification workshops. Learn more about them here.