The start of May saw the conclusion of the European Commission’s Call for Evidence on its initiative for regulating metaverses (or, as the Commission calls them, “virtual worlds”).
The proposed intervention in the metaverse space is borne out of the Commission’s desire to make the EU the best place to develop business opportunities in virtual worlds and to pioneer the development of the next version of the World Wide Web, underpinned by the immersive user experience provide by metaverses, by utilising the European Union’s digital single market.
The existing challenges
In the Call for Evidence, the Commission notes that the EU's virtual worlds industry is currently missing significant players in certain critical areas, and is generally not well-funded and fragmented. This presents a potential problem of having only a few dominant players in the future who could serve as gatekeepers, creating hurdles for new EU start-ups and SMEs to enter the market. The dominance of proprietary systems in such a closed ecosystem could have negative effects on privacy and data protection, cybersecurity, as well as the openness and freedom of virtual worlds.
The objectives
The Commission’s proposed initiative will be aimed at helping standardise and improve interoperability between metaverses, allowing users to have more freedom and the ability to transfer their digital identity, data, and assets between different virtual worlds.
Additionally, it is hoped that an intervention will create new opportunities for EU companies involved in the development of virtual worlds, such as providers of hardware and software components, system integrators, and content creators. Both public and private investments will be more coordinated, allowing virtual worlds to be deployed in a variety of societal and industrial ecosystems. Start-ups will have the opportunity to scale up their virtual world activities.
Finally, the Commission wants to empower EU citizens to use virtual worlds and provide more immersive learning and training experiences in various contexts, contributing to the development of new skills.
Proposed regulatory approach
Interestingly, the Commission does not propose to intervene via a formal legislative act (i.e. a regulation, a directive or a decision), but instead via a “soft law” mechanism (i.e. a recommendation or an opinion, likely to be the former). This is likely the result of the recognition that the numerous existing legislative measures that apply to metaverses, including the GDPR, Digital Services Act, Digital Markets Act and the Net Neutrality Regulation.
A scan of the 169 submitted letters of feedback shows that respondents are, for the time being, largely in agreement with the proposed non-legislative approach, although some responses emphasise the need for further consideration in sensitive areas such as the safeguarding and general wellbeing of children.
The Commission will now examine all responses, with further developments in this space expected in Q3 or Q4 of 2023.
