Metaverse Unleashed: Exploring the Future of Digital Interaction and Collaboration
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Human beings and their needs are at the heart of the changes and developments of our world. In meeting the needs of people, almost all hope is focused on technology. The widespread and continuous use of technology in meeting the needs of humanity continuously develops technology, and the development of technology affects and changes the whole life of human beings; this change transforms the rules of life.
Technology, today, has transformed peopleâs daily lives, what they consume, what they produce, what they think, what they do not think, their relations with each other and with authorities, and the products and services they receive from the financial and entertainment sectors. Furthermore, these changes and transformations continue steadfastly, garnering what can be called a revolutionary change in information technologies and communication.
Giving life to technology, the internet has also expanded and brought out data science. Digital processing models of data, their multiplicity, and their ability to become meaningful have pushed humans to discover and create a new universe beyond what we have known, the metaverse!
Naturally, debates in the legal realm of matters have been highlighted with the internet and with the blockchain being integral parts of conversation around the metaverse. Posing a chain of possibilities beyond our experiences of social matters such as consumption, religion, and democracy, the metaverse proposes philosophical and ideological debates, in and of itself as well as within legal interpretation and regulation.
The idea of the metaverse was first introduced as a concept in Neal Stephensonâs 1992 novel Snow Crash. While there are similarities and differences between the novelâs metaverse and our current modern concept, it can be characterized as a virtual environment that combines the physical and digital worlds, taking into account advancements in areas like the internet, computer science, and augmented reality.
It is also important to talk about Facebook in what can be called the resurgence of the metaverse beyond a fictional concept. The metaverse gained traction once Facebook rebranded as âMetaâ and Metaâs investments in the metaverse, blockchain technology, and creating a virtual world. Yet, humans have often had an interest in virtual reality and augmented reality technology, components of the metaverse.
The metaverse is not one and the same nor is it singular. With Web 3.0, big data, virtual reality, augmented reality technologies, and the software and hardware that embody them, many independent metaverses can be created. Bridges and connections can be made between them.
However, just as the emergence of the internet and the World Wide Web brought with it a plethora of new legal issues, the resurgence of the metaverse in our understanding of it today as a virtual reality will bring legal issues. The primary of which being the underlying data. Since privacy has been the most popular legal issue of the last 20 years, it is clear that it will remain so in the metaverse. It will come as no surprise that privacy will be the subject of new regulations in the Metaverse.
Regulation is a customizable mechanism of jurisdictions, being adapted to specific industries such as marketing, healthcare, finance ⌠etc. Discussions on ownership, copyrights, ownership, and usurpation of the software and hardware components of virtual reality and augmented reality, the two underlying technologies of the Metaverse, are also potential legal issues. It would not be surprising to observe that as the Metaverse becomes more integrated with artificial intelligence, and as artificial intelligence is fed data and evolves, traditional legal criteria such as the average consumer, general impression, and likelihood of confusion may change or diversify.
Although the metaverse is currently generally evaluated on the axis of entertainment and commerce, its area of application in the social and legal context will diversify as technological possibilities increase. Ultimately, it is unlikely that the metaverse will be limited in terms of products or sectors. Thereby making necessary a more complex legal analysis.
While the metaverse and virtual worlds in general bring forth new legal issues or theories, concepts such as domain names as well as assets existing within a virtual world are not completely unfamiliar. For example, digital objects such as swords and shields can be âownedâ by a character in a computer game, and objects such as houses, cars and lands in virtual worlds such as the metaverse can lead to a debate on ownership.
The legal status of these digital assets in the context of property law can be controversial. Our understanding of property law may need to be reinterpreted in the context of this new field. The value of virtual land sales and other similar commodity exchange transactions, which have already begun to be seen in the metaverse, can be worth millions of dollars. Therefore, the notion of ownership cannot be thrown out the window.
When the economic value and financial aspect of virtual reality-related ownership is taken into account, a sense of urgency develops. The lawâs indifference to the issues regarding the ownership of the rights of these virtual assets and leaving this to those who determine the rules of these virtual environments, even indirectly, will bring serious drawbacks when the investments made in these assets and the economic value of these assets are taken into consideration. Therefore, it is inevitable to review and reinterpret traditional approaches to the ownership of virtual assets.
Particularly, NFTs, crypto assets, and artificial intelligence are technological tools with extremely high potential for adaptation to the metaverse, and each of these developing technologies is unregulated by law, at least on an international/global scale.
The metaverse is interactive, therefore in these virtual worlds, users can interact with each other visually and audibly through their avatars. Users communicate with each other in the Metaverse, for example, directly or indirectly, play games, shop, participate in training, and trade. It is inevitable that a virtual or physical environment in which its members/users can interact with each other and conduct business or transactions that have legal consequences will bring legal and economic conflicts of interest. Consequently, it is foreseeable that the legal relationship between the users and Metaverse, as well as the problems and conflicts between the users themselves, will be in need of legal analysis and regulation.
Platform neutrality is the emphasis on products or services that act as platforms, not unfairly favoring or discriminating against complementary products or services. If platform neutrality or net neutrality is applied to metaverse platforms, the legal conflicts between the users themselves may come to the fore in a more practical way. Therefore, in Metaverse structures that adopt net neutrality or non-interference in content, the area of legal responsibility of these structures will automatically narrow.
It is also possible for users to commit unlawful acts or transactions against each other or the public, actions that may bring up the violation of personal rights and intellectual property rights in the metaverse. In such cases, it is important to consider how and to what extent concrete legal norms can be applied to acts performed in virtual worlds.
It should be emphasized that the unlawful performance of an act or transaction in the metaverse cannot be ignored solely on the grounds that it was performed within virtual reality. Here, there is no legal difference between the internet and the metaverse. In other words, just as unlawful acts can be performed on the internet, so can they be committed in the metaverse. Although it may seem like pointing out the obvious, this aspect should still be noted. Even if there is possible offline access to the metaverse or intranet, the situation will not change. If the actions and transactions in question are unlawful, they will be subject to legal and criminal sanctions.
Another aspect to consider would be impersonation or false identity presented by users. However, this can be combated through the application of blockchain-based identity systems or KYC-type user identification systems.
Here, the major issue in question in case of a clear criminal or legal violation is jurisdiction and applicable law. In virtual environments, national borders disappear, and users from two different countries can commit such acts against each other in a virtual environment created by a company based in a completely different, third country.
The most common method used in such cases today is to sanction the users who commit such acts based on the âGeneral Terms of Serviceâ and âUser Agreementsâ of the service provider. However, the law of the metaverse being one that is supranational, self-contained, and harmonized in the rules it sets may become a necessity in the future.
A combination of traditional legal structures, smart contracts, and potentially innovative governance mechanisms specific to virtual content is necessary for the enforcement of contracts in the metaverse. Several strategies, other than the application of legal frameworks directly, can be used to ensure effective contract enforcement. Examples can be listed as digital signatures, Decentralized Autonomous Organisations (DAOs), blockchain-based identity systems, oracles, community governance, alternative dispute resolutionâŚetc.
An integration of blockchain-based identity systems would ensure security in the metaverse. This identity system can verify user identity, and ensure that the parties of a contract are real and accounted for. Digital signatures can be created and used for confirmation as well. Establishing legal frameworks that clearly apply to virtual contracts would also strengthen security by ensuring the validity of metaverse contracts.
It is important to include decentralized dispute resolution methods in order to improve the overall reliability of contractual agreements. Whether it is through decentralized arbitration or community-driven governance systems, having efficient processes to settle disputes is crucial for virtual contracts to be effective and trustworthy.
The metaverse is constantly changing, and as technology and governance models evolve, the way contracts are enforced will also change. Legal and regulatory factors will play a significant role in shaping these enforcement methods. Encouraging community involvement in platform governance and contract enforcement is important for building trust and collective responsibility. This approach fits well with the decentralized nature of virtual environments, allowing the metaverse community to contribute to decision-making and ensure fair contract execution. Including insurance or collateral in contracts can help reduce risks from breaches or unexpected events, making contracts stronger and more resilient.
Ultimately contract enforcement in the metaverse will require a multifaceted approach, combining various strategies, both legal and technological. Consequently, this creates a quite complicated field wherein aspects of several technological tools and legal frameworks should be comprehensively utilized.
Metaverse and similar technologies rely heavily on data and data protection is crucial for their operation. These applications process data even at their inception. Once operational, these data processing activities continue to increase rather than decrease. It is not possible to envision this technology and new formation independent from data and therefore data protection. Moreover, with the developing technology, the economic value of data has increased and the data obtained from users has become vital for global companies.
Users share personal data such as biometric information with these platforms, and it is the responsibility of the metaverse platform to ensure the security of sensitive information. The platform must ensure the security of such shared data and other data and make and/or obtain the necessary permissions and notifications regarding the processing of such data before and/or when necessary. In this context, like most institutions and organizations that actively process data today and are subject to national and international regulations on the protection of personal data, the metaverse platform is obliged to protect the security and confidentiality of usersâ personal and other information.
In addition to personal data, protection of trade secrets and confidential information is important in commercial activities within Metaverse. Just as the confidential information and data we keep on our desks, in our diaries, in our documents, etc. are legally protected, our virtual identities, personal data, and trade secrets in the virtual world should be able to benefit from similar protections.
The responsibility for the safe collection and storage of the data collected in accordance with the legal periods and requirements, making the necessary notifications to the relevant persons during the collection and processing period and obtaining the necessary approvals from the relevant persons if necessary, transferring to third parties in accordance with the law, ensuring information security against cyber attacks is the responsibility of the owners of the relevant metaverse.
Despite the need to collect large amounts of data, the metaverse can implement measures to limit data collection and ensure data security through encryption methods. The concept of metadata, data produced within the metaverse, may introduce new challenges for data protection law. Overall, data protection is an ongoing concern in the development of Metaverse and similar technologies.
Perhaps, along with the data aspect, the intellectual and industrial property aspect is the most important facet of the metaverse. One of the most important aspects of the metaverse that attracts attention in the field of intellectual and industrial property law is that its users are not only consumers but also producers in the creation and continuation of the metaverse.
Users not only consume the content offered to them within the metaverse but also play an active role in the intellectual production process of such content. In fact, at the level of development that the metaverse really wants to reach, it is thought and even realized that people will start to engage in artistic activities and produce content, inventions, and designs, rather than just having fun per se. These creations can be subject to copyright law and protection in the same way to the extent that they meet the conditions. For example, the avatars that users create even before they start their activities in the virtual world can be considered as works of art.
Some argue that the limitations of the metaverse restrict the creativity and uniqueness of these intellectual products, but it cannot be denied that some creations in the metaverse are unique and can be subject to intellectual property rights.
The limitations in the creation process should not be used as a reason to deny people their rights to their intellectual work in the metaverse. Users should be protected if their intellectual products fall into the categories of works. However, there may be conflicts between the metaverse and its users regarding ownership of intellectual creations.
The user is indeed making use of the technical possibilities of the metaverse in the creation of the intellectual product, and at some point cannot go beyond the rules and technical capacity of this system. From this point of view, it can even be argued that the intellectual product does not have any particularity, that the way it is created is a result of technical possibilities, and therefore the impact of creative intelligence and talent here is limited.
However, it can neither be said that no intellectual product realized in the metaverse is or will be unique or that it cannot be technically created in any other way and therefore cannot be subject to intellectual or industrial property. The existence of technical limitations in the processes of intellectual creation cannot constitute a justification for depriving people of their rights to their intellectual labor.
Another issue is that of who will benefit from the intellectual property rights in question. Although the metaverse bases its development in terms of content on the intellectual products of its users and even encourages and promises this, the metaverse can also own the intellectual creations of its users and the rights arising from them based on the general terms of service and user agreements. It is inevitable that a conflict of interest will arise between the metaverse platform, which encourages and enables its users to produce intellectual products and the users who themselves produce the intellectual products in question.
Further, there isnât a singular metaverse, meaning users can switch between different metaverses with different owners. Here, people can bring their IP rights along with them when moving from one universe to the next. An example could be the userâs avatars, however, it may be difficult for users to claim intellectual property rights for their avatars.
The Metaverse may try to protect itself from intellectual property infringement through non-liability statements. Regulations regarding exhibition priorities may need to be developed for national or international exhibitions in the Metaverse.
Payment Systems and Tax Law
Monetary and payment systems laws in the Metaverse are governed by currency and central banking laws. Currency laws define legal tender and restrict the use of other currencies, while central banking laws regulate payments. Different countries have varying approaches to cryptocurrencies, with some restricting their use within their jurisdiction. The rise of cryptocurrencies threatens the effectiveness of central banks as they are issued and circulated outside of the central bankâs control.
The integration of the physical and virtual worlds is becoming increasingly important, with neither being meaningful without the other. However, advancements in technology are favoring the virtual world and causing dissatisfaction with the current reality. The law must adapt to this new virtual world introduced by the metaverse, addressing issues such as property rights, contracts, privacy, and personal data protection, which have been outlined above.
Some legal problems in the metaverse are similar to real-life issues, while others are unique to the virtual world. The law in the metaverse consists of both traditional legal principles and new approaches that align with the virtual worldâs realities. It is important to establish rules and educate legal professionals to handle the legal challenges posed by the rapid integration of virtual technologies.
Regulating the metaverse can very likely fall under existing legal frameworks that cover areas such as intellectual property, privacy, consumer protection, and financial transactions. Countries can also have their own laws that can be applied to various aspects of the metaverse, introduce frameworks that are specific to the metaverse, or have their own approaches as well.
There is no effort by lawmakers to create special legal regulations for the metaverse on a global scale, including Turkey. Since Turkey has not yet regulated the law applicable to crypto assets specifically either, how the existing legal rules will be applied to disputes arising from the metaverse should be evaluated. As mentioned above, the metaverse is already technically and by default subject to legal frameworks such as privacy and data protection, consumer law, intellectual property law, tax law, and other legislation applicable to the internet.
According to data from Social Network Map, 87.7 percent of the Turkish population have internet access and 89.9 percent have smartphones in October 2021. This interest in digital media has also been reflected in the metaverses even at their early stages. So much so that a famous website called sahibinden.com which is used for property sales and rentals, had advertisements for the purchase and sale of land in a metaverse.
Regulation of the metaverse is currently limited and is only likely to increase if social and economic issues arise. Regulation regarding blockchain or crypto asset technologies can however be a reference point not only in the case of the US but also in other jurisdictions. Large investments, if made, in the metaverse may challenge regulation if it affects potential profits.
Although there is no clarification on how existing laws will be applied to the metaverse in the US, the Federal Trade Commission, which is in charge of enforcing competition on the internet, is the regulatory body overlooking the metaverse. However, the main form of regulation of metaverse activity has been through the enforcement of terms of service contracts entered into by the users and the metaverse platform.
While the Federal Trade Commission overviews competition and marketing on the internet, the Securities and Exchange Commission overviews securities, and in the use of blockchain and crypto assets in a metaverse, the Securities and Exchange Commission can perform as a regulatory body.
The European Union aims to lead in the regulation of most technological advancements, as evident from the General Data Protection Regulation and with the soon-to-be fully adopted Markets in Crypto Assets Act.
With the appearance of Meta Platforms, the EU is most likely to delve much deeper into the regulation of metaverses. Evidently, the European Commission adopted a strategy on Web 4.0 and virtual worlds, with a stated aim to ensure an open, secure, trustworthy, fair, and inclusive digital environment for EU citizens, businesses, and public administrations.
In February of 2023, the European Commission released an extended study titled âExtended Reality: Opportunities, Success Stories and Challenges (Health, Education)â. The study found that 98% of professionals believe that Extended Reality (XR) technologies will have a significant impact on their industries in the next five years. Sectors such as healthcare, education, art and design, and logistics can benefit from these technologies. However, there are also challenges to consider, such as the need for awareness, access to reliable information, digital skills, and user trust. The European Digital Rights and Principles aim to promote a human-centered approach to virtual worlds, aligning with EU values and fundamental rights.
The European Commission has established the Virtual and Augmented Reality Industrial coalition to bring together industry and policymakers. They also conducted a citizenâs panel to gather recommendations on how virtual worlds can be fair, safe, and beneficial in the future. These recommendations will guide the new strategy on Web 4.0 and virtual worlds. Web 4.0 is the next generation of the internet that will enable better integration between the physical and virtual worlds. The strategy is focused on empowering people, supporting businesses, improving government services, and promoting openness and global governance.
European Commissioner of the Internal Market Thierry Breton states that the European way to foster the virtual worlds is threefold: people, technologies, and infrastructure. He states that with the Digital Services Act (DSA) and Digital Markets Act (DMA), Europe now has strong and future-proof regulatory tools for the digital space. According to Breton, the EUâs ability to shape the metaverse will depend on the ability to master and develop cutting-edge technologies in Europe and build a sustainable ecosystem, and the Commission has been laying the groundwork to structure this ecosystem.
The Policy Department for Citizensâ Rights and Constitutional Affairs Directorate-General for Internal Policies of the European Parliament released an extensive study in June of 2023 on the metaverse, authored by Mariusz MACIEJEWSKI. The study stated that commercial, industrial, and military applications of the metaverse bring both opportunities as well as significant concerns for everyday life, health, work, and security. Legislative initiatives promoting fundamental principles of law, and legislative and judicial oversight, applied comprehensively across a broad range of policies, are necessary to make sure that the metaverse will play a positive role.
The study evaluated challenges of the metaverse including metaverse-related health concerns in adults and minors, inappropriate conduct and content, personal data protection and privacy concerns, digital twins, doppelgangers, industrial, and military metaverse as products of the metaverse being a power-shifting technology. Tax avoidance, cryptocurrencies, gambling, and lottery laws were also evaluated.
Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, the Crown Prince of Dubai and Chairman of Dubaiâs Higher Committee of Future Technology Development and Digital Economy, has approved the Dubai Metaverse Strategy. Officially launched in July of 2022, the Dubai Metaverse Strategy aims to strengthen the digital economy and prepare for the future integration of the metaverse and other advanced technologies.
The Dubai Metaverse Strategy seeks to foster innovation, enhance the metaverseâs economic contributions through R&D collaborations, and promote advanced ecosystems utilizing accelerators and incubators that attract companies and projects to Dubai, foster talent and invest in future capabilities by providing the necessary support in metaverse education aimed at developers, content creators and users of digital platforms in the metaverse community and to develop Web3 technology and its applications to create new governmental work models and development in vital sectors, including tourism, education, retail, remote work, healthcare and the legal sector.
The strategy also aims to develop global standards in building safe and secure platforms for users and develop metaverse infrastructure and regulations to accelerate the adoption of these technologies. The strategyâs key pillars focus on extended reality, augmented reality, virtual reality, mixed reality and digital twins, which is a virtual representation of an object or system.
The Dubai Metaverse Strategy is built in part on Dubaiâs success in attracting blockchain and metaverse businesses and supports the development of Web3 technology and its applications. This will of course, in turn, result in growth in sectors of tourism and education as well.
Colombia is listed as the first country to hold actual court hearings in the metaverse with its participants using VR headsets and their avatars to interact in Colombia. This, of course, garnered a reaction from many. The Administrative Court of Magdalena had the hearing in Metaâs Horizon Workrooms. The participants were directed to configure their avatars.
Supporters of using artificial intelligence and the Metaverse in legal proceedings believe that Colombian law Ley 2213 allows for the use of advanced technology. However, there are concerns among scholars about the impact of virtual proceedings on access to justice. Some viewers praised the video on a Colombian judicial system YouTube channel as innovative, while others criticized it as foolish and a misuse of public funds. The magistrate ended the hearing by stating that they hope Colombia will make investments in technology to enhance the efficiency of legal proceedings.
In the latter half of 2021, the Cabinet of the Government of Barbados approved the establishment of the Metaverse Embassy. Although the government of Barbados will continue to lay out and keep up with actual consulates, there has been a move to involve the metaverse as a chance to spearhead the advancement of worldwide strategy past the actual world.
Barbados aims to strengthen international relations by their adaptation of technologies to governmental mechanisms. The Ambassador of Barbados to the United Arab Emirates is also a pioneer in the field of central bank digital currency and blockchain technology and has supported the creation of the Metaverse Embassy. Ultimately, there has been a push for the involvement of the virtual world in the mechanisms of governance, providing digital solutions for the people.
Abiding laws in the metaverse currently occur as users and platforms take precautions and make sure they are not violating already existing laws and regulations. For example, according to one view, property law in the sense of civil laws cannot necessarily be applied to the metaverse as there is no tangible property in place, therefore intellectual property laws become more relevant.
The Metaverse is a digital social ecosystem that includes communication and information. It requires its own set of laws to govern social relations within it and between the physical world. While projecting physical laws onto the Metaverse may not be effective, developing international electronic legislation can be important for keeping up with modernization.
E-jurisdiction and e-justice become relevant. These forms of governance are important for managing public relations in the metaverse. Building on traditional justice systems while adapting to the unique challenges of online social interactions can be the steps to take toward a concept of e-justice mechanisms.
It is also necessary to establish legal mechanisms to regulate public relations in the metaverse, which will help resolve conflicts between different jurisdictions. National legislation should be updated to ensure compatibility with the metaverse and provide a structured framework for online social interactions.
The development of global electronic legislation in the metaverse is likely to drive the modernization of national laws. Key objectives in the metaverseâs electronic jurisdiction include establishing trust and reputation through blockchain technology, ensuring the integrity of identification data, protecting intellectual property rights, and maintaining information security. This model of e-jurisdiction will address important issues related to virtual reality technologies and provide a foundation for regulating public relations in the Metaverse.
The Hermes Case
Emerging as quite a high-profile case, the Hermes case is between Hermes, a luxury fashion brand, and Mason Rothschild. The lore behind the Hermes Birkin Bag is that it is very exclusive, expensive and not attainable by the average person, thereby garnering a major marketing and identity of the brand itself.
Digital artist Mason Rothschild created what was called his MetaBirkin NFT collection which gave rise to the legal dispute. The issue was about ownership and intellectual property protection of virtual assets. Mason Rothschildâs collection included 100 NFTs that were inspired by the famous Birkin bag without any connection to the luxury brand itself. The NFTs went for sale on OpenSea for millions of dollars.
This, of course, gained much attention, and Hermes, filing a claim in the Southern District of New York claimed that their trademark rights were thus violated and âBirkinâ was their registered trademark and the MetaBirkins were a clear violation of their intellectual property rights.
The jury in the trial found that Hermesâ trademark rights were in fact infringed upon by Mason Rothschildâs MetaBirkins, wherein he made a profit from the NFTs based solely on the real-life Birkin bags. Rothschild had also claimed free speech as a defense, however the jury found that the First Amendment Rights were not applicable here as the similarities between the Birkin and MetaBirkins.
It is expected that the metaverse will yield an important shift in our world and daily life. Due to its initial introduction with Meta Platforms being quite explosive, it might seem like the concept of such an all-consuming daily life type of virtual reality sizzled out. However, new platforms and services in this area are being introduced as well as different jurisdictions adopting mechanisms around the metaverse.
Albeit no concrete legislation has come forward on the metaverse itself, the legal system will most likely be challenged by the new technology. Not only a challenge in creative aspects of law such as intellectual property or aspects of data but also in our understanding of decentralization and cyberdemocracy.
With the introduction of electronic voting systems, especially after the Covid-19 reality of remote systems hit, political decision-making and voting through digital means have emerged. Especially considering a blockchain-based e-voting system, democratic means in elections will be strengthened.
A rise in civilian distrust of politicians and legal systems can help strengthen the trust and continuation of state democracy. Further, voting can be a huge inconvenience where people need to take time off their work in order to stand in line and vote or even register to vote. A metaverse democracy allowing people the ability to register and vote can be a viable option that does not take up so much of peopleâs day and is more accessible.
Digital dictatorship appears as a concern when discussing digital technologies and the metaverse. Technology can very well be used to repress political dissent. For example, Facebook and the Cambridge Analytica scandal come to mind as well as the service of pro-specific political party content being exclusively promoted for some users.
Allowing any government, the power to track user activity, and the ability to store and process data and private information through surveillance surely can do more harm than good in the context of state democracy. A metaverse controlled or provided in partnership with a government can give rise to major data processing. Thus, actions to eradicate the risks of digital dictatorship should be evaluated especially in the context of the metaverse, considering different countries are adapting and introducing concepts of metaverse-based governmental mechanisms. Further, if an e-voting mechanism in proprietorship with the government body is introduced, many identity verification systems must be adapted and thus sensitive data would be processed.
There are however ways in order to avoid the creation of a digital dictatorship. Examples can be; internet access being a fundamental right, the regulation of fundamental rights on the internet and the metaverse, tailored data protection regulation, transparency, an emphasis on constitutional rights of people in the metaverse, and legislation in place combating excessive surveillance by any intelligence agency.
The use of artificial intelligence in creating several profiles is also a point of concern. This area is that of a merge of privacy laws, criminal laws, intellectual property laws, and human rights laws. For example, the damages incurred by people who were defrauded by someone in the metaverse who has stolen another personâs identity, artwork, and information would be subject to several aspects of legal penalty. Here, AI can make the creation of such profiles pretty accessible. Therefore, this sector needs to be monitored.
Perhaps each person being limited to creating a single personal profile can combat this issue or certain information must always be kept out of digital profiles, such as address, and place of birth. Another form of combatting this is through several prongs being fulfilled in the creation of a profile wherein the userâs identity is fully confirmed. This would in turn necessitate up-to-date and accurate private data protection.
It can however be expected that once the metaverse becomes more immersive in our daily lives, new forms of cybercrime are likely to increase.
Louis Rosenberg, Ph.D. states that âUnless regulated, the metaverse could become the most dangerous place of persuasion ever createdâ. Rosenberg also states; that the infrastructure required to enable immersive worlds will give powerful corporations the ability to monitor and mediate intimate aspects of our lives, from what products, services, and information consumers are exposed to, to what experiences they have throughout their day and who they are having those experiences withâ. This has been referred to as the three Mâs; monitor, manipulate, and monetize.
Forms of combatting this, however, according to Rosenberg are not only regulatory. For example, he states that steering from ad-based gains and into subscription models will likely decrease platform providers from targeted ad placement and therefore processing of sensitive data. Rosenberg also suggests restricted user monitoring activities, restricting emotional analysis for targeted advertisements, regulating virtual product placements and making sure real users can be distinguishable from non-human users.
Companies and states alike are making huge investments in the development of metaverse applications both research-wise and in practice. The only reason for this interest in the Metaverse and virtual worlds is not only the investments made by global companies, but also the rapid developments in the fields of augmented reality, virtual reality, big data, informatics, and the internet have started to enable the formation of virtual worlds that are desired to be realized.
It has become inevitable that this increasing interest in virtual worlds and a period in which human beings digitize every aspect of their lives brings with it a number of legal problems and requires the reinterpretation of existing legal concepts. Albeit many positive attributes can be found in the world of immersive metaverses such as accessibility, transparency âŚetc., there is also an impending expectation of a rise in cyber crimes.
We are currently evaluating the insurgence of metaverse and augmented realities and AI systems in their primary stage. At this point, there is an emphasis and entertainment with legal fields of intellectual property and data privacy being prominent. It may be necessary to re-evaluate the ownership of rights to objects that are controversial in terms of the applicable law in the context of the traditional concepts of property law.
The ability of users to interact with each other visually, audibly, or otherwise through the metaverse has brought legal debates and problems. Most of which are almost always interlinked with real-life consequences. This raises the question of whether will there be consequences that are solely digital. Some of these problems are problems encountered in ârealâ life, while others are problems specific to the virtual world. To these problems, the application of the applicable law directly or to the extent appropriate to the virtual world becomes relevant and ultimately some actions may be subject to criminal sanctions, others may be subject to civil sanctions.
Although some may argue otherwise, it is seen that the intellectual products that people create within the metaverse should benefit from work protection to the extent that they meet the general conditions stipulated by intellectual property law. It is determined that the direct transfer of usersâ intellectual creations to the metaverse itself is incompatible with the nature, philosophy, and formation process of the metaverse. This is because the metaverse itself encourages its users to contribute to the creation of the virtual world and to produce content. Furthermore, the general terms of service and user agreements between the platforms or institutions and organizations that create the Metaverse and the users play a critical role in the ownership and transfer of rights to the intellectual creations in the Metaverse.
On the other hand, the fact that the Metaverse and the technology it brings with it are data-dependent and continuously process data raises important issues in the field of personal data protection, data security, and privacy. Institutions behind the metaverse will most likely be the ones held accountable for the safe processing of data. While this can be enabled through existing data privacy laws, there might also be unprecedented and unregulated forms of data collection put in place in the future. This can also be said in the context of intellectual property rights. For example, Non-Fungible Tokens also created a new form of application of intellectual property rights that was not necessarily accounted for in the creation of IP regulation.
Ultimately, and especially in tow of developments in the EU regulatory landscape, new legal frameworks that merge existing laws as well as create a new legal basis for the regulation of the metaverse and augmented reality platforms can likely be on the horizon.
LEGAL DISCLAIMER
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Smart contracts can be defined as programmable contracts that are executed on their own once predefined conditions are met. These contracts facilitate the automatic enforcement of contractual terms and are supported on blockchain platforms. For more information on smart contracts and their legal analysis, please see . On the other hand, oracles are what connect the blockchain and external data sources. They enable the smart contract to keep up and react to real-world events, making them useful for contracts that rely on external information. This way contributing and making them accurate and responsive.
DAOs operate transparently and are controlled by their members, therefore can also play a significant role in governing and enforcing contracts. They provide a decentralized framework for managing and executing contracts based on predefined rules. For more information on DAOs, please see our paper .
The taxation of crypto assets has also been evaluated extensively. The taxation of crypto assets was brought under the radar of G20 countries and the Crypto Asset Reporting Framework was introduced. The metaverse itself, if yields taxable properties will not likely be exempt from taxation. Further suitable frameworks for taxing products and services deriving from the metaverse might be developed in the future. For more information on the taxation of crypto assets please see .
Breton also launched the , bringing together stakeholders from key metaverse technologies and developing a roadmap endorsed by over 40 EU organizations active in this space, from large organizations to SMEs, and universities.