The “Silent” ETOs: Can a State Be Responsible for Omissions Outside Its Borders?

Abstract

As the Metaverse evolves into a fully immersive digital ecosystem, a key question arises that, Can human rights exist in a space without physical borders, sovereignty, or jurisdiction? This paper argues that virtual spaces do not constitute real territories under international law, making extraterritorial human rights obligations (ETOs) inapplicable to states. International courts, including the ICJ and ECtHR, have consistently ruled that effective territorial control is necessary for ETOs. However, the Metaverse presents a jurisdictional paradox: it is neither terra nullius nor an extension of state-controlled land but rather a privately owned algorithmic jurisdiction. Unlike cyberspace, where states regulate cybercrime through treaties like the Budapest Convention, the Metaverse operates under corporate sovereignty, where private entities govern speech, labor, and economic rights. This study explores how human rights enforcement is shifting from state responsibility to platform governance. Companies like Meta, Microsoft, and Decentraland now act as quasi-sovereigns, adjudicating disputes and regulating digital economies. The paper questions whether corporations, not states, should be the primary duty-bearers of human rights. Further, it examines alternative legal models such as functional sovereignty, networked jurisdiction, and AI-driven legal systems to address gaps in human rights enforcement. It argues that ETOs must evolve beyond territorial doctrines, proposing a decentralized human rights framework based on transnational digital governance. By rejecting outdated territorial assumptions, this paper calls for a radical rethinking of accountability in virtual spaces. In a world where avatars outnumber citizens and economies exist in pixels, state-centric human rights obligations are not just impractical, they are legally obsolete.

Keywords: Metaverse, Human Rights, Extraterritorial Obligations (ETOs), Virtual Territories, Legal Accountability.

1. Introduction

The Metaverse represents a paradigm shift in digital interaction, where individuals can live, work, and engage in activities previously confined to the physical world. Unlike traditional online platforms, the Metaverse offers persistent, immersive, and decentralized environments, often governed by private entities rather than states. This transition from state-controlled cyberspace to corporate-controlled virtual spaces raises pressing legal and human rights concerns. If individuals face censorship, surveillance, discrimination, or economic exploitation in these spaces, who is responsible for protecting their rights?

International human rights law has traditionally relied on the principle of territoriality. Treaties like the International Covenant on Civil and Political Rights (ICCPR) and the International Covenant on Economic, Social and Cultural Rights (ICESCR) impose obligations on states to respect, protect, and fulfil fundamental rights. However, courts have consistently ruled that these obligations apply only within a state’s jurisdiction. The European Court of Human Rights (ECtHR) in Banković v. Belgium (2001) held that extraterritorial human rights obligations (ETOs) exist only where a state exercises effective control over a physical territory. Similarly, the International Court of Justice (ICJ) reaffirmed in its Wall Advisory Opinion (2004) that a state’s responsibility arises only when it governs or occupies a region. The Metaverse, however, does not meet these legal conditions, as it has no borders, no physical governance, and no sovereign authority.

This paper examines whether fundamental rights such as freedom of religion, expression, privacy, and labour rights can be meaningfully enforced in the Metaverse. It argues that states cannot be held accountable for human rights violations in virtual spaces because these environments do not constitute “territories” under international law. Instead, corporations and decentralized governance structures must take on new responsibilities in safeguarding digital human rights. The paper explores how algorithmic governance, corporate oversight, and transnational regulatory frameworks may serve as alternative enforcement models for human rights in the digital age.

2. Research Methodology

This research adopts a doctrinal legal methodology, focusing on an in-depth analysis of primary and secondary legal sources. The study is structured around the principles of international law, particularly the doctrine of extraterritorial obligations (ETOs), and examines its applicability in virtual spaces like the Metaverse.

1. Primary Sources:

• International treaties such as the International Covenant on Civil and Political Rights (ICCPR) and International Covenant on Economic, Social and Cultural Rights (ICESCR) to assess the territorial limitations of human rights obligations.
• Case law from the International Court of Justice (ICJ) and the European Court of Human Rights (ECtHR), including Banković v. Belgium (2001) and Palestine v. Israel (2004), to analyze legal interpretations of jurisdiction and territorial control.

2. Secondary Sources:

• Scholarly articles and legal commentaries on digital sovereignty, corporate governance in virtual spaces, and emerging challenges in human rights law.
• Reports from international organizations such as the United Nations Human Rights Council (UNHRC) and the OECD Guidelines for Multinational Enterprises, which provide insights into corporate responsibility in non-traditional jurisdictions.

3. Comparative Legal Analysis:

• A comparative study of the Budapest Convention on Cybercrime (2001) and the EU General Data Protection Regulation (GDPR) to evaluate whether existing cyber laws offer a legal basis for human rights enforcement in virtual environments.
• Analyzing corporate governance frameworks in platforms like Meta’s Horizon Worlds, Microsoft’s Mesh, and Decentraland to understand how digital human rights are currently regulated.

4. Theoretical Framework:

• The research critically engages with sovereignty theories, networked jurisdiction, and functional sovereignty to propose an alternative human rights enforcement mechanism beyond state-centric models.
• The paper explores the feasibility of algorithmic governance, AI-driven arbitration, and blockchain-based smart contracts as emerging regulatory tools for protecting human rights in virtual spaces.

This methodology ensures a multi-layered legal analysis, evaluating both existing legal doctrines and proposing innovative frameworks for human rights enforcement in the Metaverse.

3. Review of Literature

The evolution of extraterritorial human rights obligations (ETOs) has been extensively debated in international law. The International Court of Justice (ICJ) and the European Court of Human Rights (ECtHR) have consistently ruled that states’ human rights obligations are territorially confined unless they exercise effective control over a foreign territory or population. The landmark case Banković v. Belgium (2001) reaffirmed this principle, holding that human rights treaties do not apply extraterritorially unless a state exercises physical authority or control. Similarly, the ICJ’s Wall Advisory Opinion (2004) confirmed that human rights obligations extend only where a state governs or occupies a specific territory. These rulings suggest that human rights enforcement in virtual spaces, which lack state territorial control, falls outside traditional legal frameworks.

Legal scholars analyzing digital spaces have attempted to draw parallels between cyberspace regulation and the Metaverse. The Budapest Convention on Cybercrime (2001) established a transnational approach to online criminal jurisdiction, but its applicability remains limited to cyberspace activities with real-world legal ties. The General Data Protection Regulation (GDPR) has also set precedents for extraterritorial digital governance, holding companies accountable for data privacy violations beyond national borders. However, these frameworks assume a state-based regulatory model, which does not align with the decentralized, privately governed structure of the Metaverse.

Corporate governance of human rights in digital spaces has gained scholarly attention, particularly under the United Nations Guiding Principles on Business and Human Rights (UNGPs, 2011). These principles emphasize that corporations have a responsibility to respect human rights, even in non-state-controlled environments. Legal studies on platform governance (Bradford, 2020) highlight how corporations act as quasi-sovereigns, regulating speech, labor, and privacy in digital ecosystems. The Facebook Oversight Board and decentralized governance models like Decentralized Autonomous Organizations (DAOs) exemplify the growing role of private entities in adjudicating disputes.

Emerging scholarship explores alternatives to state-centric legal frameworks for virtual spaces. Theories of functional sovereignty (Kingsbury, 2022) and networked jurisdiction (Zittrain, 2021) propose that human rights enforcement should be based on platform control rather than territorial governance. Additionally, legal-tech scholars advocate for algorithmic governance models, where AI-driven legal systems and smart contracts regulate rights in virtual environments. These developments suggest that human rights enforcement must transition from state responsibility to decentralized governance, a shift requiring new legal and institutional mechanisms.

This literature underscores the inadequacy of traditional territorial doctrines in regulating human rights in the Metaverse. While state accountability remains the foundation of international law, digital human rights governance is increasingly shifting toward corporate responsibility, transnational legal frameworks, and decentralized enforcement mechanisms.

4. Discussion 
5. Rethinking Territoriality in International Law

The principle of territoriality has been a cornerstone of international law, defining the spatial limits of state authority and the applicability of legal obligations. However, the emergence of the Metaverse challenges conventional territorial doctrines, as it exists beyond physical borders, state sovereignty, and traditional jurisdictional frameworks. This section explores how international law conceptualizes “territory” and why the Metaverse does not fit within these established legal definitions.

The Montevideo Convention on the Rights and Duties of States (1933) outlines four criteria for statehood: a permanent population, a defined territory, a government, and the capacity to enter into relations with other states. Among these, “territory” is crucial, as it provides the spatial foundation for sovereignty and legal jurisdiction. Traditional statehood models require a geographically fixed area, whereas the Metaverse operates as a fluid, decentralized, and corporate-owned environment, making it incompatible with territorial definitions under the Montevideo framework.

The International legal precedents reinforce the necessity of effective control over a physical area for the application of extraterritorial human rights obligations (ETOs). In Western Sahara (1975), the ICJ ruled that sovereignty requires a connection to a geographically defined landmass. Similarly, in Palestine v. Israel (2004), the Court held that obligations under human rights law apply where a state exercises effective control over a territory, reinforcing the notion that ETOs are bound to physical jurisdiction. Since the Metaverse is neither occupied land nor a geographically identifiable territory, these principles do not support extending state-based human rights obligations into virtual spaces.

Some scholars attempt to draw parallels between cyberspace jurisdiction and the Metaverse, citing instruments like the Budapest Convention on Cybercrime (2001) and the General Data Protection Regulation (GDPR). However, these laws govern internet-based activities that are anchored in real-world states, whereas the Metaverse functions as a self-contained, corporate-regulated ecosystem. Unlike traditional cyberspace, where data centres, internet service providers (ISPs), and domain registrations are subject to national laws, the Metaverse lacks a clear nexus to any singular state.

Thus, applying territorial human rights obligations in the Metaverse would require a fundamental redefinition of jurisdiction in international law, moving away from state-centric models and toward corporate or algorithmic governance frameworks.

2. Human Rights in the Metaverse: Key Challenges

As the Metaverse expands, it presents unprecedented challenges to traditional human rights frameworks. While human rights law is designed for state-based enforcement, virtual spaces operate outside conventional territorial boundaries. This section examines four major human rights concerns in the Metaverse: freedom of religion, freedom of expression, right to privacy, and digital labour rights.

Freedom of religion, protected under Article 18 of the International Covenant on Civil and Political Rights (ICCPR), guarantees individuals the right to practice their religion without interference. However, in the Metaverse, religious practices may face corporate restrictions rather than state-imposed limitations. Platforms such as Decentraland and Meta control the rules governing digital spaces, raising concerns over religious freedom violations. For instance, if a platform decides to ban virtual mosques, temples, or churches for violating “community standards,” it may prevent individuals from practicing their faith in virtual spaces. Unlike physical restrictions imposed by states, these bans result from corporate governance policies, which are not directly bound by international human rights treaties. Courts have yet to determine whether such corporate actions constitute religious discrimination under human rights law.

Freedom of expression, enshrined in Article 19 of the ICCPR, ensures the right to seek, receive, and impart information. The Metaverse complicates this right as platforms increasingly moderate content, acting as quasi-sovereign entities. Unlike state censorship, which can be challenged under international law, corporate decisions to restrict speech exist in a legal grey area. A prominent example is the Twitter v. Trump case, where a private platform permanently banned a sitting U.S. president. This decision demonstrated how corporations can regulate political speech beyond the reach of traditional legal safeguards. Similar trends in the Metaverse, such as content moderation policies restricting political or religious discourse, raise concerns over whether fundamental free speech rights can be meaningfully enforced in digital spaces. While the UNGPs encourage corporations to respect human rights, they lack binding legal force. This leaves users vulnerable to corporate censorship without legal recourse.

The right to privacy, protected under Article 17 of the ICCPR, is at significant risk in the Metaverse. Unlike traditional social media, where data collection is limited to browsing history and social interactions, Metaverse platforms can track users’ eye movements, gestures, biometric data, and even subconscious reactions through advanced AI-driven tools.

For example, Meta’s Horizon Worlds collects vast amounts of user data to enhance immersive experiences. However, such surveillance raises concerns about consent and data security, as existing privacy laws like the EU’s GDPR do not fully address biometric tracking in virtual spaces. Without clear legal protections, companies can exploit personal data in ways that physical-world legal frameworks never anticipated.

The Metaverse has created a new form of employment through digital economies, including play-to-earn games and virtual asset trading. However, these emerging industries often operate in legal voids, raising concerns about worker exploitation and fair wages. For instance, in Axie Infinity, a play-to-earn block chain game, workers in developing countries performed in-game tasks for crypto currency wages, only to lose their earnings when the market crashed. Unlike traditional workplaces, where labour laws protect workers, Metaverse labour lacks regulatory oversight, leading to unregulated working conditions. The International Labour Organization (ILO) has yet to establish guidelines for virtual labour, leaving millions of digital workers without formal legal protections. If states do not regulate Metaverse labour conditions, corporations will remain free to set arbitrary rules, often to the detriment of workers’ rights.

Thus, the Metaverse presents profound human rights challenges that existing legal frameworks struggle to address. As corporate entities replace states as primary regulators, fundamental rights such as freedom of religion, expression, privacy, and labour rights face increasing uncertainty. Without a transnational regulatory framework, human rights enforcement in digital spaces will remain fragmented and inconsistent, necessitating urgent legal innovation.

3. Why States Cannot Be Held Accountable for Human Rights Violations in Virtual Territories

The rise of the Metaverse challenges traditional international legal frameworks, particularly the concept of extraterritorial human rights obligations (ETOs). In conventional legal doctrine, states are accountable for human rights violations when they exercise effective control over a physical territory or persons within their jurisdiction. However, virtual spaces being decentralized, privately governed, and non-physical, they do not meet these criteria. This section examines why states cannot be held accountable for human rights violations occurring within the Metaverse, focusing on the absence of territorial sovereignty, the lack of effective control, the impracticality of enforcement, and the privatization of human rights governance.

A fundamental principle of international law is that state obligations apply within their sovereign territory unless a state exercises extraterritorial control, as stated in ICCPR General Comment No. 31. However, the Metaverse does not qualify as a “territory” under the Montevideo Convention (1933), which defines a state as requiring a permanent population, defined territory, government, and the capacity to enter relations with other states. Virtual worlds fail to meet these criteria as they lack physical space and are instead owned and operated by corporate entities like Meta, Microsoft, and Decentraland. This lack of sovereignty means that no state can claim legal jurisdiction over the Metaverse as a whole. Unlike occupied territories where international human rights law applies, as seen in the ICJ Wall Advisory Opinion (2004), virtual spaces are neither occupied nor politically controlled by a single state. Thus, states have no legal basis to assume human rights responsibilities in these spaces.

Under ECtHR case law, particularly Banković v. Belgium, extraterritorial human rights obligations arise only where a state exercises effective control over a foreign territory or population. The ECtHR held that airstrikes conducted by NATO forces in Serbia did not establish jurisdiction because no physical control was exercised over the victims. Applying this principle to the Metaverse, states lack effective control over digital spaces because they do not administer Metaverse platforms, which are governed by private corporations. They do not control the legal framework of virtual spaces, where Terms of Service agreements dictate governance. Additionally, users are geographically dispersed, making it impossible to apply a single national legal framework. Since no state possesses direct control over Metaverse environments, human rights violations occurring within them fall outside traditional ETO obligations.

Even if a state sought to enforce human rights laws in the Metaverse, it would face jurisdictional conflicts. The Metaverse is inherently borderless, with users, servers, and companies spanning multiple jurisdictions. This results in conflicting national laws, such as U.S. free speech standards versus EU hate speech regulations. There is also legal fragmentation, as no uniform framework governs digital spaces. Additionally, states lack enforcement power even if a state legislates human rights obligations for virtual spaces, companies can relocate to jurisdictions with weaker regulations. For example, China has attempted to regulate Metaverse content, but decentralized platforms allow users to bypass restrictions, rendering enforcement ineffective. This demonstrates that human rights enforcement in digital spaces cannot be effectively tied to state jurisdiction.

Since states lack jurisdiction, Metaverse corporations have assumed quasi-sovereign functions, making them the de facto human rights enforcers. Companies like Meta and Microsoft set the rules for content moderation, speech regulation, and digital property rights. This has led to the rise of corporate human rights governance, where content moderation decisions, such as banning religious speech, are enforced by private entities rather than governments. Digital labour policies, such as gig work in the Metaverse, are dictated by corporate policies rather than state labour laws. AI-driven dispute resolution has replaced state courts in handling violations. This shift aligns with the UN Guiding Principles on Business and Human Rights (UNGPs, 2011), which recognize that corporations are not just states, they must respect human rights. Since the Metaverse operates under a corporate sovereignty model, these companies should be responsible for ensuring human rights protections.

The legal principles of territorial sovereignty, effective control, and enforceability demonstrate why states cannot be held accountable for human rights violations in the Metaverse. Unlike physical territories, virtual spaces are corporate-owned, decentralized, and borderless, making traditional state-based ETOs inapplicable. Instead, this paper argues for a new transnational framework, where human rights enforcement is governed by decentralized legal mechanisms, AI-driven arbitration, and corporate accountability structures. As human rights shift beyond state borders, traditional legal doctrines must evolve to meet the realities of digital sovereignty.

5. Suggestions

Proposing a New Framework: Decentralized Human Rights Governance in the Metaverse

The Metaverse presents a new frontier where traditional state-based human rights enforcement mechanisms are ineffective due to the absence of territorial sovereignty. As virtual spaces operate under corporate rather than governmental jurisdiction, human rights governance must shift from state-centric models to decentralized, transnational frameworks. This section explores alternative governance structures, emphasizing the role of corporate duty-bearers, algorithmic law, and a Metaverse Human Rights Compact.

International human rights law, as codified in the ICCPR and the ICESCR, presupposes the existence of a sovereign state with effective territorial control. However, as demonstrated in Banković v. Belgium, extraterritorial human rights obligations apply only where a state exercises “effective control” over a territory. In contrast, the Metaverse lacks a territorial anchor, challenging traditional enforcement paradigms.

Decentralized governance models, inspired by blockchain-based Decentralized Autonomous Organizations (DAOs), offer an alternative regulatory mechanism. These structures allow for community-driven decision-making through smart contracts that encode and enforce human rights norms. This transition mirrors the shift in corporate governance frameworks, where non-state actors assume quasi-sovereign functions, as seen in Facebook’s Oversight Board.

In the absence of state enforcement, private entities operating in the Metaverse must assume direct human rights responsibilities. The United Nations Guiding Principles on Business and Human Rights establish that corporations have a duty to respect human rights, even in non-territorial contexts. Companies like Meta, Microsoft, and Decentraland function as de facto regulators, controlling access to virtual spaces, moderating content, and adjudicating disputes.

A decentralized governance model would impose legally binding human rights obligations on these corporations. Drawing from the OECD Guidelines for Multinational Enterprises and General Comment No. 16 of the UN Committee on Economic, Social and Cultural Rights (2005), digital platforms must implement due diligence mechanisms ensuring non-discrimination, freedom of expression, and privacy rights.

Traditional legal enforcement mechanisms are inadequate for regulating behaviour in non-territorial virtual spaces. A proposed alternative is the development of algorithmic legal frameworks utilizing AI-driven arbitration panels and block chain-based smart contracts.

Smart contracts, as legally binding, self-executing digital agreements, can encode fundamental rights protections directly into platform governance. For example, a smart contract-based dispute resolution system could ensure content moderation decisions align with ICCPR standards on freedom of expression (Article 19) and freedom of religion (Article 18). Similar models have been explored in decentralized legal projects such as Aragon Court and Kleros.

A decentralized governance model would be incomplete without a transnational legal framework. A Metaverse Human Rights Compact (MHRC) could function as an international treaty, independent of state jurisdiction, defining core digital rights and enforcement mechanisms. This compact could be modelled after the Council of Europe’s Convention on Cybercrime (2001) and include legally binding provisions on privacy, labour rights, and non-discrimination.

As states lack jurisdiction in the Metaverse, a shift towards decentralized, corporate-led, and algorithmic governance is necessary. This new framework must ensure private platforms adhere to established human rights norms through binding transnational agreements and automated enforcement mechanisms. By moving beyond state-centric doctrines, digital human rights can be effectively safeguarded in the emerging virtual order.

6. Conclusion

The Metaverse is not merely an extension of the internet but a fundamentally new legal frontier, where human rights exist outside traditional territorial boundaries. This paper has demonstrated that states cannot be held accountable for human rights violations in virtual spaces due to the lack of physical jurisdiction and effective control. However, this does not mean human rights are irrelevant in the Metaverse, it only means that their enforcement must evolve beyond territorial doctrines. The failure of international law to account for digital spaces as legal territories exposes a dangerous regulatory vacuum where corporations rather than states, determine human rights protections. If religious minorities are excluded from digital spaces, if free speech is algorithmically controlled, or if digital labor is exploited in Metaverse economies, who holds the power to intervene? These questions highlight the rise of private digital governance, where corporate terms of service effectively function as law. This shift demands an urgent reconceptualization of human rights enforcement in non-territorial domains.

This paper argues that future human rights protections must be decentralized, transnational, and technology-driven. The UN Guiding Principles on Business and Human Rights (UNGPs) offer a starting point, but enforcement must go further through smart contract-based legal agreements, AI-driven arbitration, and blockchain-backed rights monitoring. The establishment of a Metaverse Human Rights Compact could create binding norms for corporations, ensuring rights enforcement in ways states cannot.

Ultimately, the Metaverse challenges the very foundation of human rights law, forcing scholars, policymakers, and technologists to rethink how rights exist beyond geography, sovereignty, and traditional legal enforcement. If human rights are to remain relevant in a virtual age, they must transcend borders, states, and outdated legal doctrines.

Harshini G S

Vel Tech Rangarajan Dr. Sagunthala R&D Institute of Science and Technology