Abstract
The Metaverse has emerged as the new reality in this modern digital era by creating an alternative virtual world where you can establish relationships, conduct business transactions, enhance your learning and many more. However, this new reality also presents specific legal difficulties in the areas of jurisdiction, intellectual property, security and privacy. As metaverse is a virtual representation of our physical world, it is essential to frame new laws that will safeguard individuals and deter crime. This article examines the past, present, and future of the metaverse by addressing some of the major legal concerns surrounding these virtual environments and the creation of new laws.
Keywords
Metaverse, Avatars, Cryptocurrency, NFT, Industry 4.0
Introduction
Industry 4.0 or the Fourth Industrial Revolution marks the next phase of modern technological advancement. It is a milestone for disruptive developments in the areas of networking & connectivity, artificial intelligence analytics, robotic innovations etc. Tech giants like Apple, Microsoft, Google and Facebook are racing to claim the metaverse which is a virtual universe that will coexist with the physical one. It is a digital inversive parallel universe where you function via your avatar which is soon going to become a place where we work, learn, shop, date, party and so much more. The metaverse brings up a wide range of legal concerns particularly because it serves as a nexus for many different technologies, requiring or connected to servers, hosting, software, platforms, hardware and other peripherals. As the metaverse is a collective virtual realm that is created by the convergence of multiple virtual worlds, there is a high chance of an increase in real-time crimes in the metaverse. Consequently, it is crucial to create new laws with an eye towards the future of this technologically advancing world.
Research Methodology
This research paper is based on a doctrinal method of collection of data. The paper is descriptive in nature and many secondary sources of information have been used for deep analysis of metaverse & its crucial challenges. The secondary sources used for this paper’s research mainly include newspapers, journals, websites and other articles.
Review of Literature
The emerging concept of the metaverse has gained significant attention as a disruptive force in our digital environment. The phrase “metaverse” was initially used by writer Neal Stephenson in his 1992 book “Snow Crash,” which described metaverse as a virtual environment in which users could communicate with one another through avatars.[1] The metaverse has evolved from the early concept of virtual and augmented reality into a complex and interconnected digital space that seamlessly merges physical and virtual realities, enabling immersive experiences, social interactions, and economic activities on a massive scale. Michael Benedict in his book “The Metaverse: A Guide to Virtual Reality & Internet Communities’ has explored the concept of metaverse and its implications for virtual reality (VR) and internet communities, thereby, giving us the picture of the future technological world. “The Fourth Transformation: How Augmented Reality & Artificial Intelligence Will Change Everything” written by Robert Scoble and Shel Israe clearly points out the multidimensional understanding of the metaverse and its legal implications, including intellectual property rights, privacy, and the challenges of governing virtual environments which eventually led to the question of future laws on metaverse.
Evolution of Metaverse
Although the metaverse has grown in popularity recently, it is not a new concept to the common man. The concept of metaverse is quite popular through online gaming platforms like Roblox, Minecraft, Fortnite etc. Second life, launched in 2003 was one of the earliest virtual worlds to catch the interest of the general public.[2] It allowed users to create avatars, explore virtual landscapes, socialize, and engage in various activities. Top gaming companies have already built their own virtual worlds with their own gaming economies, virtual currencies, storyline & characters.
Industry 4.0 has taken the metaverse into a completely new level by making a technology based on augmented reality space that could change how we live and interact forever. Think of it as an internet that we’re not just looking at but also living in. We shall experience the metaverse through our digital avatars, performing those behaviors digitally alongside other individuals who desire to share in our experience, rather than just reading or watching about it. Soon, almost everything everywhere will become the metaverse. It is no more just an experiment by a few tech geeks, it is becoming an inevitable alternative to reality.
Legal Concerns Surrounding Metaverse
Due to the distinctive characteristics of the metaverse, which is still developing and growing, various legal issues are raised. Some of the most significant legal issues relating to the metaverse are listed below:
- Privacy in Metaverse: In order to personalize our avatars and create a perfect virtual replica of our real world, we disclose more private and sensitive information in the metaverse. There is a high chance of misuse of this data in the metaverse, thereby posing challenges to our data confidentiality and security as our data can easily be accessed by unauthorized parties or intruders.
- The conflict of states for control over transboundary virtual spaces: The metaverse is a closed regulatory system with its own regulator and coercive controls. Any state simultaneously aims to keep control over its residents and its borders. The conflict over who has jurisdiction in the digital sphere is a stark example of this. As a result, we should anticipate further pressure from national authorities on the metaverses, and they may even be outright prohibited in some nations.
- Legal Status of Individual Metaverse Elements: Metaverse involves virtual transactions with virtual objects & virtual currencies which include NFTs and cryptocurrencies. NFT and cryptocurrencies are not governed by a centralized body or intermediary, like a bank or a government. This will unavoidably prompt the law enforcement authorities to question the authenticity of such transactions in the near future.
- Copyright Infringement: Due to the prevalence of user-generated content and the possibility for unauthorized use of protected works, copyright infringement is a serious legal concern in the metaverse. Users can build landscapes or buildings in the metaverse that resemble real-world places or architectural designs that are protected by copyright. In these situations, there is a chance of violating the rights of the original copyright owners, especially if the structure or design is remarkably similar to the protected work.
Interpreting Current Regulations on Metaverse
The metaverse which is a rapidly expanding digital realm, raises complex legal and regulatory questions. Interpreting current regulations in the context of the metaverse involves assessing their applicability, addressing jurisdictional challenges, and striking a balance between fostering innovation and protecting user rights. Some of the major legislations regarding metaverse in India are as following: –
- Information Technology Act, 2000: IT Act, 2000 is the most important legislation which covers the laws relating to the recent technological advancements in India. The IT Act was passed in order to provide legal legitimacy to electronic transactions and to stop cybercrime.
- The Indian Penal Code, 1860: The Indian Penal Code covers provisions relating to hacking, cybercrime, identity theft etc.
- The Copyright Act, 1957: As metaverse users build landscapes or buildings to resemble the real world, the Copyright Act provides protection to original artistic works.
- Digital Personal Data Protection Bill, 2022: The Digital Personal Data Protection Bill, 2022 or the DPDP Bill explores the idea of the “Right to be Forgotten” as a relatively recent right that tries to protect personal data. It is a piece of law that aims to safeguard people’s online privacy by creating a legal framework for the processing of sensitive data.
Numerous domestic and international legal laws have been put in place to safeguard citizens’ rights in this quickly developing technological environment. Some of the crucial international laws that have the potential to regulate the metaverse are stated below:-
- General Data Protection Regulation (GDPR): The goal of the GDPR is to protect individuals and the data that identifies them, as well as to make sure that businesses that collect this data do so in a responsible manner. The GDPR also requires that any personally identifiable information (PII) that websites collect be anonymized or pseudonymized, meaning that the real name of the user is changed to a fictional one.
- California Consumer Privacy Act (CCPA): The California Consumer Privacy Act gives consumers more control over the personal information that businesses collect about them and the CCPA Regulations provide guidance on how to implement the law. This landmark law secures new privacy rights for California consumers.
Key Legal Precedents
The question of whether ownership of virtual property in the metaverse can be regarded as real property subject to ownership rights has long been an issue. The court determined in the case of MDY Industries, LLC v. Blizzard Entertainment, Inc.[3] that the selling of virtual game items was legal. According to the court, the selling of the virtual goods without the owner’s consent constitutes copyright infringement because they were protected by copyright. Capitol Records, LLC sued ReDigi, a platform for digital music sales, for copyright infringement in the case of Capitol Records, LLC v. ReDigi Inc.[4] in the year 2013. Users of ReDigi were able to sell other users their digital music files. The “first sale doctrine” did not apply to digital files, hence the court held that reselling digital music files violated copyright. Even though there are no specific laws for metaverse, these legal precedents demonstrate that some of the major aspects of metaverse are already covered by our existing laws.
There is a high chance for monetizing the user data related to metaverse by tech companies for targeted advertising. In Google Inc. v. Vidal-Hall[5], Google was accused of violating Safari’s privacy settings by tracking user data for specific advertising purposes. The claimants were given damages by the court after finding that Google had violated their privacy.
The right to be forgotten is equally important as the right to privacy of a person. The right to be forgotten is the ability of a person to request the removal of their personal data from public display. As we are creating a digital version of ourselves in the metaverse, our personalized avatars will contain our sensitive personal information. Therefore, when a person wants to get himself out of the metaverse he should be vested with his right to be forgotten. In the case Google Spain SL, Google Inc. v. Agencia Espanola de Proteccion de Datos Mario Costeja Gonzalez, a Spanish resident, complained that Google had displayed search results for him that were inaccurate and unrelated. The Court of Justice of the European Union (CJEU) held that people have the right to ask that any outdated or inaccurate personal information about them be removed from search results.
Since India is a democratic country, the fundamental rights of the citizens and stringent government regulations often come in contradictory to each other. In Shreya Singhal v. State[6] Section 79(3)(b) of IT Act was struck down which provided for the removal of content on a notice from the government agency. The provision was declared unconstitutional by the court since it did not guarantee a hearing before the content was deleted. The right to privacy was declared as a fundamental right guaranteed by the Constitution of India in the case of K.S. Puttaswamy v. Union of India[7]. The court stated that the right to privacy encompassed the rights to physical integrity, control over one’s personal information, and choice over how that information is used. Since only some aspects of laws relating to metaverse are covered by the existing laws, it is very important to frame new laws in order to protect the rights of the citizens in the future.
Need for New Legal Framework for Metaverse
Money & technology are evolving rapidly. Currencies have changed from its physical form to its digital form and with the advancement of technology, it has now changed to cryptocurrencies and NFTs (Non-fungible tokens). As money takes its new form, it is important to give legal status to individual meta elements. This brings the need to frame new laws with the changing needs of the society.
The most important question that arises is that will the metaverse be safe? This is a primary concern because there are already crimes happening in the metaverse. In December 2021, a woman in San Francisco strapped Meta’s oculus headset to play her favorite shooter game. When she entered the game her digital avatar was approached by another stranger who harassed and raped her avatar digitally. It rises the concern for digital rape. It is horrid and not an isolated incident. According to the Centre for Countering Digital Hate, a violent incident occurs every 7 minutes on VR Chat which is a popular virtual reality world.[8] This makes the concept of metaverse more problematic. Virtual realities plunge you into a digital environment; the slightest touch or sensory experience is heightened and exaggerated to give us an immersive experience. Therefore, every crime that is committed can feel much more real and intense. These issues are likely to get magnified once the metaverse gets expanded.
It is mostly not only the adults that face issues but also the children as for most tech companies, their target audience are teenagers who are always on the internet. Studies have shown that children are not safe in the metaverse due to the reported crimes of children being exposed to graphic sexual content, children being trained to repeat racial epithets, children taking on extremist views from strangers, and children being subjected to sexual harassment. It is practically impossible to stop these crimes unless and until new laws are framed to protect the interests of the society.
The Future of Metaverse
The future of the metaverse will probably resemble our physical world in many aspects and at the same time, it will also present new options for socializing, working, learning, and having fun. Users will be able to interact, work together, and co-create in the metaverse with people from various backgrounds and regions. Users will be able to explore their identities, creativity, and curiosities in an almost limitless number of ways in the metaverse. The metaverse’s potential for the future is enormous, and it is currently being actively investigated and developed. Some of the technologies that will merge together to shape the future of the metaverse include:
- Extended Reality (XR): This involves the usage of mixed reality (MR), virtual reality (VR), and augmented reality (AR), which allow users to view digital content at various levels of immersion and realism. The entry points to the metaverse will be XR gadgets like headsets, glasses, and haptic suits that let users feel as though they are in another world or overlay digital information on their actual environment. Apple has shocked the world by launching its mixed reality headsets called Vision Pro which indeed has a snap-in prescription lens which could customize a set of lenses according to your prescription within a few minutes for people having eyesight issues to get an immersive experience of the metaverse. In the near future, this Extended Reality or XR will be carried on to a next level with the intention to bring the virtual world closest to the actual physical world.
- Blockchain & Web3: These are the technologies that make it possible for digital assets and services to be owned, traded, and governed in a safe and decentralized manner. Users will be able to create, own, and exchange their own avatars, items, lands, and experiences in the metaverse as well as take part in its growth and governance using blockchain and Web3. Cryptocurrencies and non-fungible tokens (NFTs) will be able to be used as means of trade and payment in the metaverse. As the legality of cryptocurrency still remains as a question in the present, the future of the modern world will be able to answer it which will eventually legalize the transactions in the metaverse.
- Brain Computer Interfaces (BCI): These technologies allow for direct brain-to-computer contact, allowing people to operate digital gadgets using their thoughts or feelings. BCI might make it easier and more intuitive to engage with the metaverse while also improving sensory feedback and immersion. BCI may potentially open up new avenues for learning, expression, and creation in the metaverse. Therefore, the metaverse will not just remain as a virtual world which we can just see and read but soon it will transform to a place where we can experience real life emotions.
Suggestions
The metaverse is not just one platform or technology; rather, it is a network of interconnected platforms and technologies, including blockchain, bitcoin, NFTs, augmented reality, virtual reality, and more. The idea of the metaverse has numerous legal problems and difficulties since it entails novel ways of transacting, interacting, and identifying that could not be compatible with the rules already in place.
Precise rules and laws should be established to safeguard people’s privacy in the metaverse. This may entail setting limitations on data collection, storage, and use, as well as putting robust encryption mechanisms in place. Intellectual property rights should be designed and enforced within the metaverse to protect the creations of individuals and businesses. Along with that, ownership rights should be established and recognized for digital assets like virtual land and virtual goods. While implementing all these laws, it is also important to implement measures to combat cyber threats and to protect users from malicious activities within the metaverse.
As metaverse will target teenage audience in order to establish this concept, strict guidelines should be established for content moderation to ensure a safe and inclusive environment within the metaverse. Guidelines should also be developed for the use of artificial intelligence in the metaverse with a view to ensure ethical and responsible practices. Another important aspect which is to be covered while framing laws is to address the challenges of cross-border interactions within the metaverse by developing international agreements. The implementation of each of these steps will serve as a beginning point, and as the metaverse develops, it will probably necessitate ongoing examination and adaption.
Conclusion
Metaverse can revolutionize the world but at the same time, it can be also be a dangerous and unhealthy escape from reality. As holograms and sensory experiences cannot replace human emotions, the metaverse cannot become a second life but it can at best lead us to an imprisoned reality if not used properly with due care.
There is a continual dichotomy between law and technology, a sort of dichotomy under which the law always seems to be attempting to catch up with the leaps taken by technology. In conclusion, the growth of the metaverse presents intricate legal issues that call for careful thought. Future laws must address concerns with digital property rights, virtual economies, privacy and data protection etc. Establishing adaptive legal frameworks that balance innovation and individual rights in the ever-changing metaverse will require a coordinated effort by policymakers, technologists, and various stakeholders.
Arya S.
Kerala Law Academy, Law college,
Trivandrum.
[1] NEAL STEPHENSON, SNOW CRASH, Pg.4 (Bantam Books 1992)
[2] INDIATIMES, https://www.indiatimes.com (last visited June 11, 2023)
[3] MDY Industries, LLC v. Blizzard Entertainment, Inc., 629 F.3d 928, 9th Cir 2010
[4] Capitol Records, LLC v. ReDigi Inc., 934 F. Supp. 2d 640; 106 U.S.P.Q.2d 1449
[5] Google Inc. v. Vidal-Hall, (2015) EWCA Civ 311
[6] Shreya Singhal v. State, (2013) 12 SCC 73
[7] K.S. Puttaswamy v. Union of India, (2017) 10 SCC 1
[8] SOCIOBITS, https://sociobits.org (last visited June 12, 2023)