THE METAVERSE’S LEGAL MINEFIELDS WE NEED TO NAVIGATE

As technology companies race to make their mark on the metaverse, an industry that is predicted to create a market opportunity of $1tn (€880 billion) per year, the virtual realm has already become a legal minefield.

The metaverse has been heralded as the next version of the Internet but unlike its predecessor, avatars would represent us in this cyberspace, usually with augmented reality (AR) or virtual reality (VR) through the use of headsets and goggles.

However, the way we act, live, and shop in virtual reality is already giving regulators a headache even before the metaverse has truly taken off.

Here are three of the main legal areas that may prove tricky to regulate.

1. HOW WE ACT AND WORK IN THE DIGITAL WORLD

Reports of avatar-groping and even digital gang rape in the metaverse have previously appeared, but how virtual assault is attempted remains unknown.

Proving assault and harassment in the virtual world may be challenging since most nations’ laws demand actual bodily injury in real life.

Of course, online harassment is nothing new, and how it is now regulated is likely to transcend into the metaverse, according to Tom Harding, head of Osborne Clarke UK’s Games & Interactive entertainment practice.

“Is the employer vicariously liable for their employee’s actions in the metaverse? The short answer is no one probably knows with any certainty at the moment.”

-Tom Harding-
Osborne Clarke

“I work a lot in the games sector, and there have been analogous instances of people harassing others in games, which has led to liability, so the natural conclusion is that the concept could transfer into the metaverse” He told Euronews Next.

However, as the metaverse will not just be used for gaming and socializing but also for work, virtual harassment may need to be taken more seriously.

2. WHO CAN ACCESS OUR DATA AND HOW WILL IT BE USED?

We are introducing technologies into our homes that can capture our facial expressions and motions by utilizing headsets, Googles, and other devices to access the metaverse, which raises concerns about how our data will be kept safe.

As corporations like Meta, Nike, and even Walmart grow into the metaverse, it’s unclear how they’ll handle our data.

The General Data Protection Regulation (GDPR) of Europe, which was aimed to provide consumers with more data protection and clarify how businesses utilize information, might be translated into the metaverse.

While the EU’s GDPR was implemented to harmonize data regulations throughout the European Union, it is unclear who, if anybody, would control the metaverse.

“To try and apply current laws to the metaverse context is going to be a significant challenge. From a regulatory perspective, you’re never going to have a single ‘metaverse law’ that tries to cover everything, in the same way, there is no one-stop single ‘internet law’ because that just doesn’t make any sense,” said Harding.

How you can apply and develop a suitable regulatory environment based on the current framework is what people are trying to get their heads around, he added.

“Building it will undoubtedly come first, which will still be technically challenging, and it will then also develop as things move along. But how it’s actually then governed is going to be the big legal challenge”.

3. INTELLECTUAL PROPERTY

Because the metaverse is only a virtual reality, it will collide with real-world intellectual property rights, which are fundamentally territorial.

For example, UK trademarks cover the United Kingdom, while EU trademarks cover EU member states, however, this does not apply in the virtual world.

“There’s been a body of case law that has been developed over time to try and connect IP infringement in the online world to the real world. This legal principle is commonly called targeting,” said Nick Kempton, IP and video games lawyer at Osborne Clarke.

“But there are criteria, at least under UK/EU rules, to establish ‘where’ the infringement is happening and certain facts and indicators, such as currency or a website domain, may not even be present in a metaverse”.

With the rise of NFTs and individuals utilizing them to buy land, property, or even clothing in the metaverse, as well as develop their own virtual worlds and content, there will be numerous difficulties with ownership and how it is recorded.

Because there are several metaverses, transporting objects purchased or generated in one virtual world to another will result in intellectual property (IP) concerns.

“From an IP angle, I think at a high level the main sort of issues that really come into play will be around territoriality because the metaverse is territorially agnostic and intangible,” Kempton said.

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