Challenges of enforcing laws in Metaverse

Abstract

Metaverse is certainly the most used buzzword of today’s era. The metaverse is a digital platform where people can interact with each other using avatars. Avatars are the digital incarnation of a person and they can be designed as per the desire of the user. Metaverse is an ecosystem closely linked with Web 3.0 which is associated with the usage of blockchain technology. It is having limitless potential to revolutionize the internet and by visualizing this massive evolution and its bright future, many companies like Roblox, Decentraland, Sandbox, and Nike and startups like Somnium space, The Fabricant, VeeFriends have started building their impactful presence on Metaverse. It sounds magical and fascinating to us but one significant thing is getting unnoticed here and that is, the exponential increase of cybercrimes. Several challenges are required to be tackled such as the enforcement of laws in Metaverse, lack of clear rules and regulations, jurisdictional issues, intellectual property rights, and many more. 

This research paper attempts to highlight the need for lawmakers and tech- experts to develop a comprehensive framework that will address the legal issues created by Metaverse and its subjective solutions. The scholar attempts to answer some important questions regarding data protection, privacy, and intellectual property rights infringement associated with the usage of such platforms. The paper attempts to give an in-depth examination of the views of law experts, interdisciplinary researchers, and technology specialists. Enforcing laws in the metaverse is an uphill task but with the efforts of all stakeholders, it is possible to make Metaverse a more secure and safer space for all users.

Keywords

Web 3.0, Metaverse, Jurisdiction, Intellectual property rights, Data protection, Cybercrimes, SimGens

Introduction

One of the most famous and highest-grossing films depicted the concept of having an Avatar which could indulge itself in different kinds of activities in a different world. That movie i.e., Avatar is indeed a reality at this time.

Various countries are building their presence on the metaverse and India too has a significant stake in the metaverse and many Indian companies like Tata Elxsi, Flipkart, Byju’s, etc. are active in the metaverse.

Wikipedia defines the metaverse as a virtual shared space that is created by the convergence of virtually created reality and physically persistent virtual space, including the sum of all virtual worlds, augmented reality, and the internet.[1]To put it in simple words, it is a virtual space created by the convergence of virtual reality and the internet. It is that generation of the internet which is built on the principles of augmentation, immersion, decentralization, automation, autonomization, mobilization, and some real-time activities.[2] Numerous technologies and companies will corporate to combine proprietary systems and open-source systems to weave VR experiences together by using audio, visual, and haptic technology. This will help in the development of content creation, monetization, and socializing technologies.[3]

It is a platform where people engage themselves in various kinds of activities such as conducting business, gaming, and socializing, without actually doing it in their real lives. To ensure fairness for all the users, rules and regulations must be formed and strictly adhered to. There is a need to address digital rights, sector regulations, and civil, criminal, International, and procedural law adoption. On the other hand, it raises various questions on personal data protection, privacy protection, human rights, neuro rights, etc.

On a separate note, it is often argued whether avatars can have their own legal identity. A researcher from Singapore University believes that they should be considered legal subjects. If that is done, what about the person who has multiple avatars?

The metaverse has a new degree of freedom and fantasy that will open up opportunities for crime and misconduct. This will lead to the risk of mental trauma and upon the commission of the crime, the users can be mentally scarred. As this platform will become mainstream, it won’t be surprising to see the emergence of Avatar lawyers who will engage themselves to provide services like company incorporation, arbitrating digital land disputes, and virtual legal firms. It is not just an imagination anymore as a New Jersey-based law firm has already established its presence in Metaverse.

Research Objective

The objective of writing this paper is to identify and analyze the regulatory and legal obstacles that arise in this virtual world and to propose recommendations for stakeholders to encounter these challenges and create a safe environment in the metaverse.

Research Methodology

The nature of this research paper is descriptive and analytical. Secondary sources like websites, newspapers, and journals are used for the research. Qualitative and quantitative research methods are used here along with detailed case studies for a complete understanding of the challenges of enforcing laws in the metaverse along with the solutions for the same.

Review of Literature

1. “Regulating the Metaverse: Legal and regulatory challenges in virtual worlds” by Joshua Fairfield and Kyle Langvardt (2017): Here the author explores the regulatory and legal challenges associated with virtual worlds, including the metaverse. It discusses the complexities of digital identity, jurisdictional ambiguity, anonymity, cross-border enforcement, virtual property rights, regulation, governance, and the adaptation of existing laws to virtual environments.
2. “Virtual Worlds and Criminality” by Majid Yar: It examines the relationship between criminal behavior and virtual worlds. It explores the types of criminal activities that occur in virtual environments, such as fraud, theft, harassment, or exploitation which revolve around the challenges faced by law enforcement in detecting and prosecuting these crimes, as well as the impact of digital identity and anonymity on criminal behavior.

Challenges relating to the metaverse and their solutions

Metaverse is an open-ended platform that has a collection of various digital experiences, assets, and environments leveraging virtual technologies. The ideas and creations of the metaverse are backed by tech giants like Google, Microsoft, and Apple. It can change various aspects of life such as education, healthcare, business, etc. Gartner has predicted that 25% of the world’s population will spend at least an hour daily in the metaverse by 2026. Considering the increase in cyber-attacks and the need for data protection following the trend of digitalization during recent times, legal experts have expressed that it will quickly become a ground for security and privacy issues.[4] Cybercrimes and fraud are also major areas of concern; thus, it poses numerous challenges and they can be complex and diverse:

1. Multiple jurisdictions – As metaverse is a global platform where users from different parts of the world interact with each other. This creates a challenge as laws governing different activities may vary across different countries thus making it difficult to determine which laws apply. This issue is escalated further as people operate there anonymously and hence it becomes really difficult to determine his/her country and even after determining the name of the country, it becomes difficult as to which law should be applied to that situation. It can be solved by the effective cooperation of Metaverse operators, international organizations, willing countries, and other stakeholders. It would require international coordination and cooperation to make rules and regulations for investigating and prosecuting crimes.
2. Anonymity – As users can operate under an anonymous name and identity, it becomes difficult to find out the real identity of that person and to prosecute them if they have committed any crime. Also, it can be an uphill task to obtain evidence of illegal activities happening on Metaverse as the users operate under pseudonymous or anonymous identities. To address this issue, Metaverse can ask for the relevant identification and information before allowing the user to access its services and it should implement systems to track the behavioral pattern of the users to detect any illegal activity if any persists there.
3. Difficulty in detecting and investigating crimes – As the metaverse contains a vast amount of data, it will be a challenging task to identify criminal behaviors and to suspect and prosecute them through such huge data. It will become more difficult if the real identity of a person is not linked with his/her avatar. To address this issue, greater cooperation between law enforcement agencies, virtual world operators, and technology companies is required. Establishing a unified framework and developing new technologies to analyze data generated by the users can help detect and investigate crimes.
4. Intellectual Property – The Intellectual property issues will also be stressed as the metaverse is defined and evolved. Issues such as ownership, protection, patent issues, and piracy are potential challenges. Content owners will have to understand their usage rights and their licensing boundaries. Recently there has been a case in which a video game developing company was blamed to use celebrity lookalikes in its game. This issue can only be resolved by the formulation of unified laws specific to intellectual property by the joint corporation of the participating countries.[5]

Various companies have taken steps to protect their brand by demanding their intellectual property rights including Nike which has filed a trademark application for its slogan and logo to prevent unauthorized use of the same by the third-party creators.

• Security and privacy – With the advent of Web 2.0, new risks of security and privacy are created. It pushed privacy and security beyond what we are prepared for. The new levels of sensitivity, formats of data, control, ownership, and sharing are massively changed. For such concerns, Metaverse should ensure that the data will not be stored beyond a particular period and it will be used to track the irregular behavior of a person in case of the commission of the crime to only collect the evidence and it has to ensure the users that their sensitive data will not be utilized for any other illegal purpose. Developers will need guidance to create a privacy-focused experience for their users.
• Taxation of virtual goods and services – It has become a major concern for the G20 economies. Tax evasion would be an issue in Metaverse and cryptocurrencies will be used for that purpose. To address this issue, rules, and regulations must be made to prevent double taxation.[6]
• Gambling laws– As various countries have banned certain kinds of games in their respective countries, to avoid this situation, people can try playing those games on platforms like Metaverse. To avoid the conflict between legal and illegal games Metaverse should consult the participating countries and formulate gaming laws accordingly.
• Criminal law – Potential crimes like child pornography, assault, stalking, financial fraud, etc. will happen at the metaverse. It can amplify existing online crimes but it is highly unlikely that it will create any new problems. However, it is a possibility that virtual crimes will impact the real world. An open-minded approach will be required to tackle such a problem.[7]

We must also recognize the Grand Charter of Laws. Metaverse makes it necessary for the collaboration of modern technologies and interdisciplinary research across various fields. The model of e-jurisdiction can address issues emerging from virtual reality technologies and the evolution of humanity, providing the usage of e- law to maintain public relations within the metaverse.

• Governance of virtual worlds – As the metaverse will be having all private and sensitive information not only of the users but also of the countries having their virtual presence on the metaverse, it might be possible that the providers of such a platform can abuse their powers, dictate rules and regulations and prioritize their interests. Ethical issues like problems with identity, exploitation, harassment, etc are also really complex and not-so-easy to tackle.  So, proper governance is required to avoid such an issue.
• Fake avatars – It has been reported that 75 % of male users created a female avatar and 80% of female avatars created a male avatar for themselves. This further complicates legal regulations and obligations. It can be regulated by asking for the identity of the users and checking whether it is matching the one with the avatar, this can solve the issue.
• Virtual products – Metaverse can manipulate the users by introducing virtual products on its platform and it can be tailored according to the behavioral pattern of the user. Users will encounter virtual personas like SimGens. They will make regular conversations with the users and use databases and algorithms to influence the interests and beliefs of the users. SimGens will be designed in such a way as to appear friendly and trustworthy to the users and thus can manipulate them in the worst possible ways. To reduce such manipulation, proper governance is required.
• Monetization – As with any other social media, Metaverse too needs revenue to support itself and its shareholders. For that purpose, instead of directly asking for money, social media platforms are showing ads instead and this makes them generate revenue but in this process, the users are paying more valuable things like their personal and sensitive information to these social media platforms which can be utilized by them in many horrible ways. In this aspect, it’s better to give metaverse some monetary benefits to using those platforms instead of making them store our behavioral patterns and sensitive data. Users have to make the right choice.

Case laws involving legal issues in the context of virtual platforms

There have been a lot of court cases regarding the enforceability of laws on virtual platforms and their legal and regulatory challenges. They can serve as the precedent of enforceability of laws in Metaverse. Some of the relevant cases are:

1. In the Bragg v. Linden research case, which took place in the USA in 2007, there was a dispute over land ownership of property in the virtual world, Second Life, which was owned by Linden. Marc Bragg, the plaintiff in this case, claimed that Linden Lab had violated his rights over property by taking away his land without giving any compensation. The court ruled in favor of Linden research lab saying that virtual assets like goods and land were subject to the creator’s terms of service. This case highlighted the need to change the perspective of the usage of the same traditional legal concepts and modernize the law and understand its impact on online platforms like Metaverse.[8]
2. In the case of MDY Industries, LLC v. Blizzard Entertainment, (2010), there was a dispute over the use of bots in the ‘World of Warcraft game created by Blizzard Entertainment. MDY Industry had created a bot that allowed players to automate certain gameplay functions in the World of Warcraft game, which was in direct violation of the terms and conditions of Blizzard. The court ruled in favor of Blizzard Entertainment as the MDY Industry was violating the copyrights of Blizzard. This case has set a legal precedent regarding intellectual property rights on a virtual platform and the enforcement of software licenses.[9]
3. In the case of Eros, LLC v. Leatherwood Holdings, the importance of protecting intellectual property and virtual goods was highlighted by the court, and Leatherwood Holdings was held liable for using the copyrighted content of Eros.[10]

Suggestions

The usage of advanced technologies like blockchain technology and AI can help and assist in identifying, tracking, and prosecuting offenders and can aid in the enforcement of laws in the metaverse.

 Due to the nature of the decentralization of Metaverse, it becomes important for the participating countries to harmonize and cooperate in the formulation of rules and regulations to address cross-border issues. They can establish international treaties and agreements to create a framework regarding the creation of laws. It is a rapidly evolving space and thus it becomes important for governments and industries to share information and collaborate accordingly to address emerging challenges. Industry standards must be established to ensure compliance.

Virtual platforms like Metaverse need to invest in tools for moderation and content filtering technology to suspect, identify and remove hate speech, illegal content, or any such harmful content. This will help to create an inclusive and safer environment for all users.

Furthermore, it is crucial to educate both law enforcement agencies and users about the virtual platforms and the laws which apply to them. It can include training law enforcement officers on the procedure to investigate crimes in the metaverse. It is really important to educate innocent users on the consequences and the risk of using such platforms and how they can make the best use of such platforms without compromising their legal rights, intellectual rights, and human rights.

Lastly, to deter illegal activities, it is crucial to have strong enforcement mechanisms which can include penalties for illegal activities and the ability of the law enforcement agencies to investigate crimes in the metaverse.

Conclusion

The Metaverse presents some unique challenges for the enforcement of laws. The global and decentralized nature of this platform rises some important questions regarding the jurisdiction, Intellectual property rights laws, and the commission of online crimes in such spaces. Legal professionals, policymakers, and technology companies need to come together to create a legal framework that ensures the promotion of innovation and the protection of the legal rights of the users while addressing the challenges. It is an exciting space having many opportunities. It breaks down conventional thinking and creates new regulatory, legal, and technical issues that need resolution.

Enforcing laws in Metaverse is a difficult and evolving challenge that requires a proactive and collaborative approach. Regulators and lawyers have always struggled to keep abreast with the technology. This age of digitalization and technology has left them with limited choices. They have to understand the need of today’s era and evolve themselves accordingly.

The Grant Charter of Laws Metaverse is a forward-looking and ambitious initiative that aims to formulate an in-depth framework for addressing aspects such as cyber security, criminal law, constitutional law, and property law, thus Metaverse corporation must support such an initiative and work together with the non-governmental organizations and research institutions.[11] 

                                                                                    -Bhawna Kothari

                                                                                    (Government Law College, Mumbai)

---

[1] Wikipedia contributors, Metaverse, The Free Encyclopedia, (May 9, 2023), https://en.wikipedia.org/wiki/Metaverse

[2] Emma Perot, Brand Protection & Enforcement in the Metaverse, LexisNexis (Nov. 12, 2021), https://www.lexisnexis.co.uk/legal/guidance/brand-protection-enforcement-in-the-metaverse

[3] Forbes Tech Council, Six Unaddressed Legal Concerns For The Metaverse (Feb. 17, 2022), https://www.forbes.com/sites/forbestechcouncil/2022/02/17/six-unaddressed-legal-concerns-for-the-metaverse/?sh=7d6bd64c7a94

[4] Infosecurity Magazine, “Policing the Metaverse: Law Enforcement Faces a New Frontier”, (Nov. 30, 2021), https://www.infosecurity-magazine.com/news-features/policing-metaverse-law-enforcement/

[5] Blockchain Council, What Laws Govern the Metaverse? Blockchain Council (May 12, 2023), https://www.blockchain-council.org/metaverse/what-laws-govern-the-metaverse/

[6] John Doe, “The Impact of Technology on Legal Practice,” Lexology (June 1, 2020), https://www.lexology.com/library/detail.aspx?g=0936ff54-4eb4-4c18-85e1-680dcaf62cb8

[7]Jeffrey P. Cunard & Richard M. Smith, Identity Crimes and Law Enforcement in the Metaverse, 51 Rutgers Computer & Tech. L.J. 29 (2021), https://www.researchgate.net/publication/365603793_Identity_Crimes_and_Law_Enforcement_in_the_Metaverse.

[8] Bragg v. Linden Research, Inc., 487 F. Supp. 2d 593 (E.D. Pa. 2007)

[9] MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d 928 (9th Cir. 2010)

[10] Eros, LLC v. Leatherwood, 746 F.3d 139 (4th Cir. 2014)

[11] Sarah Meaker, The Metaverse: Three Legal Issues We Need to Address, Brunel University London (Oct. 13, 2021), https://www.brunel.ac.uk/news-and-events/news/articles/The-metaverse-three-legal-issues-we-need-to-address