• by Shankar Gupta , January 30, 2007

Online marketplace eBay has begun delisting all auctions of "virtual property," such as currency or avatars used by players in online role-playing games like "World of Warcraft," "Everquest," and "Neopets."

eBay spokesman Hani Durzy said the move stemmed from growing legal concerns surrounding the sale of virtual property. "Because of those legal complexities, we felt the most prudent thing to do at this point was to ban them from sale for the site," he said.

Although Durzy declined to comment on which legal issues eBay was concerned with specifically, one possible problem stems from the uncertain ownership of virtual goods. The terms of service of nearly every massively multiplayer online game state that the items and currency that the players amass belong to the game publisher and not the actual player. eBay's terms of service require that sellers own the property they list for auction.

The taxability of online assets also remains unresolved. In October, the congressional Joint Economic Committee launched a probe investigating how virtual property and income should be taxed.

But, while eBay is banning the sale of virtual items used in massively multiplayer online games, the auction site will continue to allow users to buy and sell items used in virtual world Second Life. "Our current mode of thinking is there's a legitimate question as to whether Second Life should be lumped in with these massively multiplayer online games," Durzy said. Second Life, which has a virtual economy and a virtual currency that can be exchanged for real dollars, is more of a "virtual world with a virtual economy" than a game, he said.