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Virtual Property Towards a General Theory Przemysław Pałka Thesis submitted for assessment with a view to obtaining the degree of Doctor of Laws of the European University Institute Florence, 20 December 2017 European University Institute Department of Law Virtual Property Towards a General Theory Przemysław Pałka Thesis submitted for assessment with a view to obtaining the degree of Doctor of Laws of the European University Institute Examining Board Professor Giovanni Sartor, European University Institute (Supervisor) Professor Hans-Wolfgang Micklitz, European University Institute Professor Roger Brownsword, King’s College London Professor Bartosz Brożek, Jagiellonian University © Przemysław Pałka, 2017 No part of this thesis may be copied, reproduced or transmitted without prior permission of the author Researcher declaration to accompany the submission of written work Department of Law – LL.M. and Ph.D. Programmes I Przemysław Pałka certify that I am the author of the work Virtual Property: Towards a General Theory I have presented for examination for the Ph.D. at the European University Institute. I also certify that this is solely my own original work, other than where I have clearly indicated, in this declaration and in the thesis, that it is the work of others. I warrant that I have obtained all the permissions required for using any material from other copyrighted publications. I certify that this work complies with the Code of Ethics in Academic Research issued by the European University Institute (IUE 332/2/10 (CA 297). The copyright of this work rests with its author. Quotation from this thesis is permitted, provided that full acknowledgement is made. This work may not be reproduced without my prior written consent. This authorisation does not, to the best of my knowledge, infringe the rights of any third party. I declare that this work consists of 99.000 words. Statement of inclusion of previous work:. I confirm that sections 3.2.2. The Formation of Legal Concepts: Organic and Manual Acquiring of Meaning; 4.2.1. Objects; 5.1.2. The Three Step-Method: Particularization of the Idea by the Features of an Object; and 5.2.3. The Method Applied draw upon an earlier article I published: Przemysław Pałka, ‘Redefining 'Property' in the Digital Era: When Online, Do as the Romans Did’, EUI Law Working Paper No. 2016/08. I confirm that section 4.2.5. Relations draws upon an earlier book section I published: Przemysław Pałka, ‘Terms of Service are not Contracts: Beyond Contract Law in the Regulation of Online Platforms’ in: Stefan Grundmann (ed) European Contract Law in the Digital Age (Intersentia 2017). Statement of language correction (if applicable): This thesis has been corrected for linguistic and stylistic errors. I certify that I have checked and approved all language corrections, and that these have not affected the content of this work. Signature and date: 18 October 2017 Thesis Summary The primary contribution of the thesis is a theory enhancing the legal understanding of the phenomenon of virtual property, encompassing presentation of data and a new conceptual framework to interpret it. The author argues that the normative debates concerning the phenomenon have underestimated the importance of understanding and conceptualizing it first, and aims at amending this gap. The ‘virtual property phenomenon’ refers to the users of internet platforms and online computer games ‘possessing’ virtual items – digital objects that exist within these services – and getting into economic and social relations concerning these items, with other users, service providers and third parties. These relations are regulated by different types of service-specific rules – contractual and the ‘code’ – created unilaterally by the service providers, who additionally retain the ability to interpret and enforce them, using ‘digital force’, i.e. by modifying and deleting virtual items, and blocking users’ accounts. The primary challenge stems not from the fact that the phenomenon is not regulated, but from the fact that lawyers lack words – terms and concepts – to even conduct a meaningful debate about it, or how to respond to it. The thesis consists of six chapters. Firstly, the author describes the phenomenon and analyzes the theoretical and regulatory legal challenges posed by its emergence. Secondly, he critically assesses the state of the art. Thirdly, a methodology to address these challenges is proposed, which can also be used in other research projects concerning law and technology. Fourthly, the author explains how the process of digitalization has fundamentally challenged the assumptions that private law held about the structure of reality, and proposes new doctrinal tools to conceptualize it. Fifthly, the author presents a legally useful concept of virtual items, and argues that granting users property rights over them might not be the optimal means of realizing the property goals. Finally, the author proposes a normative solution, a correction of private law, responding to the new type of inequality in relations, namely a user protection law. 1 2 Acknowledgments A risk that one faces in life, particularly when succeeding in something, is to come to believe that one has accomplished something on one’s own. That it is one’s own works and merits alone that led one to success. This is the risk I am facing now, and it is the risk I would like to acknowledge. There is no way I could thank everyone who helped me throughout the last four years, and there is no way I could thank them enough. This section is not a formality I included because I had to. It is my humble attempt to, at least to some degree, express my gratitude to all those who deserve it. First and foremost, I would like to thank my supervisor, Prof. Giovanni Sartor. For everything. For his patience and advice, for his encouragement and support. Giovanni has been the best supervisor I could have ever hoped for. A magnificent scholar, with an incredible knowledge of the field(s), an ability to spot all the flaws in the argument even before I knew what the argument was, and a mind so sharp that I sometimes suspect he can cut a bistecca alla Fiorentina by merely thinking about it. Not only did he help me make this dissertation much better than it would have been without him, but also profoundly shaped the way in which I think about law and legal scholarship. Fulfilling his role of the advisor in an excellent manner would be more than enough to be thankful to him. Yet, Giovanni did so much more than advising me on my research. He always had time, and he always cared, not only about my work, but also about me. When I was struggling with doubts and crises, he would schedule our meetings at the end of the day, so that we could spend long hours talking, even if I am sure he would have more exciting things to do. And when I was excited about something, he was excited as well. He made my stay here not only fruitful, but also pleasant and fun. Thank you Giovanni, for all the things we did together! "x(Px&Gx)®TxPG Secondly, I would like to thank Prof. Hans-Wolfgang Micklitz, for whom I have had a pleasure and an honor to work as an assistant over the last two years. A mentor and a wonderful boss, Hans taught me so much about how to be a good scholar, on both a professional and personal level. Not that I have become one, but now I have an ideal to look up to. Having read my reaction paragraphs during our first seminar, Hans told me that I thought like a French philosopher. Over the years to come, he made me understand that this can actually be a compliment. Thank you Hans, for crushing all the schemes in my mind, for making me see things I have not seen before, for all your support, and for helping me realize that although I could have spent another four years refining this thesis, at some point I should just finish it. If not for you, I could have spent the rest of my life with an almost-perfect version 45.8b of the first draft. And for so much more! I would also like to thank the other two members of the jury, Prof. Roger Brownsword and Prof. Bartosz Brożek, for their time, effort and comments on this dissertation. It was an honor to 3 have the two great thinkers, whose work I read and admired for years, to read this little piece of mine. And it is thanks to their critique and suggestions that when, one day, I remove the word ‘towards’ from the title of this work, the result will be much better than it would have been without them. Throughout these four years, many more scholars helped me in one way or another. They all deserve credit. I would like to thank Professors Nehal Bhuta, Duncan Kennedy, Giorgio Monti, Nicholas Onuf, Gianluigi Palombella, Dennis Patterson, Martin Scheinin, and Lawrence Solum, for their time, comments and suggestions. In particular, I would like to thank Prof. Joseph Weiler for all the wisdom he shared with me, and for teaching me that there is more to scholarly papers than just the formal argument, for all his work as the President of the EUI, and all his assistance when as reps, my friends and I, tried to make the EUI an even better place. I would also like to express my special gratitude towards Prof. Urs Gasser, thanks to whom I was able to spend three months of my final year at the Berkman Klein Center for Internet and Society at Harvard University, a tremendous place and a vibrant community, where many of the ideas presented in this thesis have been challenged and refined.

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