Five legal predictions for the Metaverse

20th December 2021

What is the Metaverse?

The metaverse is the transformation of how we engage with platforms and other users on the internet. Hailed as the next generation of the internet, the metaverse is a multi-faceted approach to the online sphere, which immerses users in a three-dimensional, sociable world supported by its own crypto-currency based economy.

Users will inhabit an online space in a way similar to a real-life space. Initially, this might be through platforms such as Decentraland, where users log in to a shared platform using a normal computer interface and engage with others within that space through an avatar. But, as virtual reality technology matures, the metaverse will become something we can engage in in a much more three-dimensional sense – controlling our avatars’ movements with our own bodies.

As the tech world gears up to take users to this new world, what are some of the key legal issues that platform developers will need to consider?

  1. Personal Data Insights. Platforms will be able to track social interactions on a much more detailed and nuanced level, meaning the insights derived from metadata created in the metaverse will become an increasingly valuable asset. Users of these spaces will want to understand their personal data rights to a much greater degree than previous users of the internet have expected and will be much more fluent in exercising these rights than previous generations. Protecting personal data and communicating effectively how these rights are protected in the design of the metaverse platform is likely to be a key factor in determining which platforms become the most successful.
  2. Governing User-to-User Interactions. The government is currently in the process of getting the online safety bill into law. This bill puts a significant burden on user-to-user service providers. The current vision of the metaverse is that users will be able to encounter and interact with each other when in this space in a very casual manner, without oversight from the platform developers. Yet, in its current draft, the online safety bill asks user-to-user service providers proactively to intervene to prevent any content that they reasonably consider to be illegal from appearing on their platform. Whether metaverse operators will be expected to fulfil this obligation, or whether the rise of the metaverse will derail the objectives of the online safety bill is yet to be seen but will be a key issue for developers.
  3. Jurisdictional and Applicable Law Issues. As the metaverse is run on a decentralised system, it will become increasingly difficult to know which laws apply. The nature of the internet as it currently stands can already make a determination of the relevant jurisdiction and applicable laws difficult to fathom. This is likely to be amplified in the new world where social and economic transactions take place between users from a variety of jurisdictions and whose locations may be difficult to determine.
  4. Property Ownership. As each metaverse is supported by its own economy based on cryptocurrencies, the issue of property ownership will be as pervasive in the metaverse as it is in our everyday life. NFTs have been making headlines over the last year as the tech world tries to concretise the idea of asset ownership online, and so the associated legal questions that arise from the use of NFTs such as how to establish, transfer and realise NFTs will become ever more relevant. Metaverse developers will need to consider embedding the use of smart contracts into platforms to enable users to realise tangible value within that metaverse.
  5. Security Breaches. The idea that the metaverse brings together such a broad range of technologies and allows users to live out so many social and economic interactions in one space is incredibly exciting in terms of the opportunities for individuals and organisations to reach new audiences. However, it also means that the metaverse will be a highly attractive place for hackers and cybercriminals to carry out serious damage. Security breaches, if not handled with care and skill, could cause insurmountable reputational damage for a metaverse platform provider. Designers of such platforms will need to consider how to implement robust preventative methods and tactical reactive measures to protect users on their platform.

The current vision of the metaverse largely deploys existing technology in a new environment, meaning the above predictions are generally not entirely alien to web developers. However, as the vision for the metaverse and the underlying technology evolve, there will doubtless be new legal concepts and challenges. As ever, the law will be running behind the technology but it looks like an exciting ride.