Metaverse, a new field for EU to promote safer and fairer market practices

The Metaverse: A Fusion of TechnologiesThe metaverse combines technologies such as virtual reality (VR) and augmented reality (AR) to create lifelike personal and business experiences online. It is envisioned as an immersive digital world where individuals can interact, trade, and experience new realities remotely.

This innovation brings unprecedented opportunities across various societal areas. Job seekers can engage in training, citizens gain access to personalized public services, and cultural inequalities are reduced. Additionally, consumer practices are transformed by the legal implications of Web 3.0, which persist into the metaverse and upcoming Web 4.0.

The European Union (EU) plays a crucial role in this development, striving to harness the metaverse's social potential while ensuring a safer and fairer consumer experience.

Exploring the Legal Implications

Property Rights in the Metaverse

In the metaverse, users can create estates, buy, sell, or exchange goods. Interoperability allows consumers to transport identities and ownership across applications. For instance, companies like Nike and Epic Games have collaborated on digital goods such as sneakers for avatars, while others invest heavily in virtual real estate.

Intellectual Property Challenges

Intellectual property rights face challenges in this digital world. In 2022, Hermès sued a Non-Fungible Token (NFT) creator for marketing digital copies of its Birkin bag, citing trademark infringement. However, linking these violations to creators remains difficult due to the anonymity of avatars.

Data Ownership and Privacy

Digital identity in the metaverse requires extensive data collection. The interoperability of virtual spaces introduces risks, as transferring data between applications can expose vulnerabilities. Operators must establish agreements to ensure data security and compliance. Clifford Chance highlights that the metaverse will "stress-test existing laws and pressure regulators to match the sophistication of the technology."

The EU’s Response

Existing Regulations

While the EU lacks specific metaverse laws, its existing regulations provide a legal framework. Acts like the Digital Services Act, Digital Markets Act, and General Data Protection Regulation protect users and hold platforms accountable. These laws, being technology-neutral, are fully applicable to virtual worlds.

For unique practices not covered under existing laws, regulations such as the Markets in Crypto-Assets (MiCA) Regulation of 2022 address emerging challenges, aiming to increase transparency, protect asset holders, and maintain market integrity.

New Initiatives

The EU has proposed two key acts:

• The AI Act aims to mitigate risks associated with artificial intelligence while fostering innovation.

• The European Digital Identity Act provides users with full control over their digital identities.

  
  

The latter has been in effect since 2024, with implementation already underway.

The metaverse represents an evolving frontier. With ethical guidance and comprehensive regulations, it holds immense potential to transform society while ensuring fairness and security for all.