METAVERSE: WHAT LEGAL ISSUES CAN WE EXPECT IN THE NEXT CHAPTER OF THE INTERNET?
INTRODUCTION
Despite being the latest buzzword, the term metaverse was first coined by writer Neal Stephenson in the science fiction novel Snow Crash dated 1992. It is a portmanteau of the words "meta" (meaning "after" or "beyond" in Greek) and "universe". Described as "the next chapter for the internet" by Facebook's CEO, Mark Zuckerberg, the metaverse can be defined as a simulated digital environment based on augmented reality (AR), virtual reality (VR) and blockchain, along with ideas from social media, to generate spaces for user interaction imitating the physical world [1]. To put it simply, metaverse is a virtual reality world where you can go to work, go to school, go shopping, watch concerts, etc.
Zuckerberg, who has changed Facebook's name to Meta and is currently developing a metaverse, has stated in Meta's "Founder's Letter" published on October 28, 2021, that "[his] hope is that within the next decade, the metaverse will reach a billion people, host hundreds of billions of dollars of digital commerce, and support jobs for millions of creators and developers" [2]. As compelling as this next chapter for the internet may be, the metaverse has already caused global discussions regarding the legal challenges which have arisen or may arise.
Some argue that the metaverse is "neither new nor lawless" [3]. For example, Alexander Woon, a lecturer at the School of Law, Singapore University of Social Sciences, and Of Counsel with RHTLaw Asia, claims that "normal rules of criminal and civil law do not stop applying just because you are "in" the metaverse" [4]. He argues that if a person, while in Singapore, uses their online avatar to harass someone, the provisions of the Protection from Harassment Act would be applicable, and the harasser could be prosecuted [5]. Whereas many others are concerned about the unforeseeable and unpredictable legal challenges that metaverse may present. In this article, we will provide a brief overview of legal issues that we can expect in the next chapter for the internet.
LEGAL ISSUES
Data Protection and Privacy: A major concern regarding metaverse platforms is data protection and privacy. It is well known that smartphone apps and websites collect personal data on its users and monitor their behaviour. The list of personal data that is already being collected today is endless, and the list includes, but is not limited to, users' name, email, location, time spent on a smartphone app or website, items in a shopping basket, pages visited in the past, etc. [6]. Although data protection and privacy laws allow users to not consent to the collection of their personal data (for instance, users can "ask app not to track" or "reject all cookies"), investigations show that even if user "ask app not to track", some iPhone apps disregard this and gather data anyway [7]. Given current data protection and privacy issues in the physical world, such issues become even more alarming and forefront in the digital world. This is because virtual reality platforms will allow organisations to collect personal data that normally could not be accessed through a smartphone app or a computer screen. It seems that virtual reality platforms will be disturbingly invasive as it is stated that companies will be able to monitor physiological responses and biometric data, such as facial expressions and vocal inflections, movements, and perhaps even brainwave patterns [8][9]. Hence, from a data protection and privacy standpoint, the development of metaverse platforms raises many unanswered questions according to legal professionals. Who will bear responsibility for data processing? Who will be responsible for lost or stolen data? How and when will users provide consent for data processing? [10][11]
Intellectual Property and Copyright: Besides enabling its users to go to work, attend meetings, watch concerts, etc., the metaverse also serves as a space for people to create together. Generating intellectual property rights collaboratively and the matter of joint ownership will undoubtedly be one of the legal challenges of metaverse. Consequently, the European Commission is already considering reforms regarding co-created intellectual property that result from new technologies [12].
The non-fungible token ("NFT") marketplace may also result in intellectual property and copyright infringement issues. Unlike fungible assets (such as currencies, stocks, mutual funds, precious metals, etc.) that have an agreed-upon value and are interchangeable with other items of similar value, non-fungible assets are one-of-a-kind and are not interchangeable [13]. A non-fungible asset may be real estate, trading cards, paintings, etc [14]. NFTs are a type of non-fungible asset that can be described as "certificates of ownership for virtual or physical assets" [15]. While traditional artwork, such as paintings are valuable due to their uniqueness, digital files can be easily and endlessly duplicated [16]. With NFTs, artwork is "tokenised" to produce a digital certificate of ownership that can be purchased and sold [17]. Despite the participation of many in the NFT market, legal professionals argue that most participants are not familiar with the legal constraints related to copyrighted work. For instance, an NFT purchaser might think that they purchased the underlying art that is associated with the NFT. However, unless specifically granted to someone else, the original creator is the copyright owner who retains the exclusive right to copy, distribute, modify, publicly perform, and publicly display the art. Consequently, an NFT purchaser who thinks that the rights associated with the underlying art were misleading, and who faces a loss in value, might create litigation liability for the NFT seller [18].
Sexual Harassment: Unfortunately, sexual harassment is as much of an issue in the digital world, as it is in the physical world. In fact, there are already a concerning number of reported cases of sexual harassment in the metaverse.
For instance, Ms. Siggens was playing the shooter game, Population One, with an Oculus Quest VR headset when her avatar was groped and ejaculated on by another player's avatar. When Ms. Siggens asked this avatar to stop, quite worryingly the response she received was, "It's the metaverse — I'll do what I want". Ms. Siggens stated that she reported the user account of the person that harassed her through a form within the game and that she then received an automated response stating that "punitive action had been taken against the user". However, there is no clarity regarding the punitive action that was taken against this user [19].
Another victim of sexual harassment in the metaverse is a beta tester for the Horizon Worlds, a VR platform owned by Meta, whose avatar was groped by a stranger. Meta's internal review regarding this incident reached the conclusion that the beta tester should have used a tool called "Safe Zone", which essentially places avatars in a protective bubble that prevents other avatars from interacting with them until they are out of the bubble. Described as "old-fashioned misogyny repackaged for the digital age", this comment has been criticised as "the digital equivalent of telling women that if they don't want to get harassed while walking down the street then they should just stay at home" [20]. However, acts of sexual harassment in the metaverse are not just limited to groping, there have even been reports of gang rape in metaverse platforms [21].
Following such sexual harassment complaints, Meta has introduced a "Personal Boundaries" feature that will be coming to Horizon Worlds and Horizon Venues. This new feature will ensure a 4-feet distance between avatars, and if an avatar tries to invade another avatar's personal boundary, the system will halt their movement as they reach the boundary. Meta will be introducing this 4-feet boundary as a default setting but will consider further changes such as allowing people to set their own boundaries [22].
Personal Injuries: As mentioned above, metaverse uses a combination of VR and AR. Although these technologies may sound similar, there are significant differences between them in terms of the equipment they require and the experience they provide. VR requires headsets that completely take over your vision to create the impression that you are elsewhere. Whereas, AR devices, such as the Microsoft HoloLens, are transparent and allow its users to see everything in front of them, while projecting images over whatever they are looking at. This technology also extends to smartphones with AR apps and games, such as Pokémon Go, which use your phone's camera to track your surroundings and overlay additional information on top of it, on the screen. In simpler terms, virtual reality replaces your vision, whereas augmented reality adds to it [23].
Existing AR games, such as Pokémon Go, show that there is no doubt that metaverse will cause similar or even worse personal injuries. Pokémon Go is a 2016 AR game that can be played on IOS and Android devices. The game uses mobile devices with GPS to locate, capture, train and battle virtual creatures called Pokémon, which appear as if they are in the player's real-world location. The aim is to collect as many different characters as possible and to find them, players must physically walk, bike, or drive around neighbourhoods. Despite the game's popularity, researchers claim that this game caused up to $7.3 billion damage across the United States 148 days after its release, as this smartphone game app has caused car accidents, injuries and even deaths [24]. Taking these possible personal injuries into account, the developer of Pokémon Go, Niantic, requires all players to agree to their terms of use, which contain a disclaimer that waives Niantic's liability in the event of an accident, injury or damage. Users will not be allowed to play unless they agree to these terms of use. Further, the disclaimer contains a binding arbitration clause, which aims to prevent players from bringing a lawsuit in court against Niantic [25].
Similar to Pokémon Go, metaverse requires the use of a head mounted device, thus the user cannot see the real environment that they are in, which makes it probable for users to trip over objects, fall down a set of stairs or through a window, hit a wall or even people around them, which may cause serious physical injury to the user and those surrounding them. In addition, it has been reported that "the metaverse can be so real and scary that 30% of participants could not make it across a room with a simulated tightrope walk between the twin towers, so there may even be a few heart attacks" [26]. Further, metaverse may cause personal injury to the mind, as users may unknowingly access areas with flashing lights and/or imagery that may cause discomfort and/or seizures for those with photosensitive epilepsy, and even personal injury to emotions, as exposure to violent imagery may traumatize users and even result in post-traumatic stress disorder [27]. Thus, unless the terms of use of virtual reality platforms contain a similar waiver of liability, lawsuits for negligence and product liability against metaverse developers will become unavoidable.
CONCLUSION
The metaverse undoubtedly creates many opportunities. However, governments and lawmakers must take initiative, and adapt to the emergence of new technologies to prevent the aforementioned legal issues. For instance, the European Commission (EC) has already proposed the Digital Services Act (DSA), a new piece of legislation that aims to increase the transparency and safety for users in online environments, while allowing digital businesses to grow. Moreover, Canada has also proposed a new data privacy legislation entitled "An Act to enact the Consumer Privacy Protection Act and the Personal Information and Data Protection Tribunal Act and to make consequential and related amendments to other Act".
SOURCES
[1] https://about.fb.com/news/2021/10/founders-letter/
[2] ibid.
[3] https://www.singaporelawwatch.sg/Headlines/the-metaverse-is-not-above-real-world-law-opinion
[4] ibid.
[5] ibid.
[6] https://www.thesun.co.uk/tech/6507593/what-is-cookie-internet-accept-info-decline-delete-cookies-explained/
[7] https://www.washingtonpost.com/technology/2021/09/23/iphone-tracking/
[8] https://www.nortonrosefulbright.com/en-us/knowledge/publications/5cd471a1/the-metaverse-the-evolution-of-a-universal-digital-platform
[9] https://www.dataprotectionreport.com/2022/01/privacy-in-a-parallel-digital-universe-the-metaverse/
[10] https://www.pwc.ch/en/insights/regulation/legal-compliance-metaverse.html
[11] https://www.nortonrosefulbright.com/en-us/knowledge/publications/5cd471a1/the-metaverse-the-evolution-of-a-universal-digital-platform
[12] https://www.pwc.ch/en/insights/regulation/legal-compliance-metaverse.html
[13] https://www.businessinsider.com/fungible-meaning
[14] https://www.bbc.com/news/technology-56371912
[15] ibid.
[16] ibid.
[17] ibid.
[18] https://www.whitecase.com/publications/alert/rise-nfts-opportunities-and-legal-issues
[19] https://www.nytimes.com/2021/12/30/technology/metaverse-harassment-assaults.html
[20] https://www.theguardian.com/commentisfree/2021/dec/18/metaverse-new-venue-sexual-harassment-facebook
[21] https://www.independent.co.uk/tech/meta-personal-boundaries-metaverse-sexual-harass-b2007878.html
[22] https://www.independent.co.uk/tech/meta-personal-boundaries-metaverse-sexual-harass-b2007878.html
[23] https://sopa.tulane.edu/blog/whats-difference-between-ar-and-vr#:~:text=The%20distinctions%20between%20VR%20and,while%20VR%20is%20completely%20virtual&text=VR%20requires%20a%20headset%20device,only%20enhances%20a%20fictional%20reality
[24] https://news.sky.com/story/death-by-pokemon-go-game-caused-up-to-7-3bn-damage-claim-researchers-11146310
[25] https://www.hshlawyers.com/articles/pokemon-go-personal-injury-safety-issues-and-liability/
[26] https://www.forbes.com/sites/schuylermoore/2021/12/22/law-in-the-metaverse/?sh=df6aec045d13
[27] https://www.computerweekly.com/feature/A-legal-minefield-called-the-metaverse
INTRODUCTION
Despite being the latest buzzword, the term metaverse was first coined by writer Neal Stephenson in the science fiction novel Snow Crash dated 1992. It is a portmanteau of the words "meta" (meaning "after" or "beyond" in Greek) and "universe". Described as "the next chapter for the internet" by Facebook's CEO, Mark Zuckerberg, the metaverse can be defined as a simulated digital environment based on augmented reality (AR), virtual reality (VR) and blockchain, along with ideas from social media, to generate spaces for user interaction imitating the physical world [1]. To put it simply, metaverse is a virtual reality world where you can go to work, go to school, go shopping, watch concerts, etc.
Zuckerberg, who has changed Facebook's name to Meta and is currently developing a metaverse, has stated in Meta's "Founder's Letter" published on October 28, 2021, that "[his] hope is that within the next decade, the metaverse will reach a billion people, host hundreds of billions of dollars of digital commerce, and support jobs for millions of creators and developers" [2]. As compelling as this next chapter for the internet may be, the metaverse has already caused global discussions regarding the legal challenges which have arisen or may arise.
Some argue that the metaverse is "neither new nor lawless" [3]. For example, Alexander Woon, a lecturer at the School of Law, Singapore University of Social Sciences, and Of Counsel with RHTLaw Asia, claims that "normal rules of criminal and civil law do not stop applying just because you are "in" the metaverse" [4]. He argues that if a person, while in Singapore, uses their online avatar to harass someone, the provisions of the Protection from Harassment Act would be applicable, and the harasser could be prosecuted [5]. Whereas many others are concerned about the unforeseeable and unpredictable legal challenges that metaverse may present. In this article, we will provide a brief overview of legal issues that we can expect in the next chapter for the internet.
LEGAL ISSUES
Data Protection and Privacy: A major concern regarding metaverse platforms is data protection and privacy. It is well known that smartphone apps and websites collect personal data on its users and monitor their behaviour. The list of personal data that is already being collected today is endless, and the list includes, but is not limited to, users' name, email, location, time spent on a smartphone app or website, items in a shopping basket, pages visited in the past, etc. [6]. Although data protection and privacy laws allow users to not consent to the collection of their personal data (for instance, users can "ask app not to track" or "reject all cookies"), investigations show that even if user "ask app not to track", some iPhone apps disregard this and gather data anyway [7]. Given current data protection and privacy issues in the physical world, such issues become even more alarming and forefront in the digital world. This is because virtual reality platforms will allow organisations to collect personal data that normally could not be accessed through a smartphone app or a computer screen. It seems that virtual reality platforms will be disturbingly invasive as it is stated that companies will be able to monitor physiological responses and biometric data, such as facial expressions and vocal inflections, movements, and perhaps even brainwave patterns [8][9]. Hence, from a data protection and privacy standpoint, the development of metaverse platforms raises many unanswered questions according to legal professionals. Who will bear responsibility for data processing? Who will be responsible for lost or stolen data? How and when will users provide consent for data processing? [10][11]
Intellectual Property and Copyright: Besides enabling its users to go to work, attend meetings, watch concerts, etc., the metaverse also serves as a space for people to create together. Generating intellectual property rights collaboratively and the matter of joint ownership will undoubtedly be one of the legal challenges of metaverse. Consequently, the European Commission is already considering reforms regarding co-created intellectual property that result from new technologies [12].
The non-fungible token ("NFT") marketplace may also result in intellectual property and copyright infringement issues. Unlike fungible assets (such as currencies, stocks, mutual funds, precious metals, etc.) that have an agreed-upon value and are interchangeable with other items of similar value, non-fungible assets are one-of-a-kind and are not interchangeable [13]. A non-fungible asset may be real estate, trading cards, paintings, etc [14]. NFTs are a type of non-fungible asset that can be described as "certificates of ownership for virtual or physical assets" [15]. While traditional artwork, such as paintings are valuable due to their uniqueness, digital files can be easily and endlessly duplicated [16]. With NFTs, artwork is "tokenised" to produce a digital certificate of ownership that can be purchased and sold [17]. Despite the participation of many in the NFT market, legal professionals argue that most participants are not familiar with the legal constraints related to copyrighted work. For instance, an NFT purchaser might think that they purchased the underlying art that is associated with the NFT. However, unless specifically granted to someone else, the original creator is the copyright owner who retains the exclusive right to copy, distribute, modify, publicly perform, and publicly display the art. Consequently, an NFT purchaser who thinks that the rights associated with the underlying art were misleading, and who faces a loss in value, might create litigation liability for the NFT seller [18].
Sexual Harassment: Unfortunately, sexual harassment is as much of an issue in the digital world, as it is in the physical world. In fact, there are already a concerning number of reported cases of sexual harassment in the metaverse.
For instance, Ms. Siggens was playing the shooter game, Population One, with an Oculus Quest VR headset when her avatar was groped and ejaculated on by another player's avatar. When Ms. Siggens asked this avatar to stop, quite worryingly the response she received was, "It's the metaverse — I'll do what I want". Ms. Siggens stated that she reported the user account of the person that harassed her through a form within the game and that she then received an automated response stating that "punitive action had been taken against the user". However, there is no clarity regarding the punitive action that was taken against this user [19].
Another victim of sexual harassment in the metaverse is a beta tester for the Horizon Worlds, a VR platform owned by Meta, whose avatar was groped by a stranger. Meta's internal review regarding this incident reached the conclusion that the beta tester should have used a tool called "Safe Zone", which essentially places avatars in a protective bubble that prevents other avatars from interacting with them until they are out of the bubble. Described as "old-fashioned misogyny repackaged for the digital age", this comment has been criticised as "the digital equivalent of telling women that if they don't want to get harassed while walking down the street then they should just stay at home" [20]. However, acts of sexual harassment in the metaverse are not just limited to groping, there have even been reports of gang rape in metaverse platforms [21].
Following such sexual harassment complaints, Meta has introduced a "Personal Boundaries" feature that will be coming to Horizon Worlds and Horizon Venues. This new feature will ensure a 4-feet distance between avatars, and if an avatar tries to invade another avatar's personal boundary, the system will halt their movement as they reach the boundary. Meta will be introducing this 4-feet boundary as a default setting but will consider further changes such as allowing people to set their own boundaries [22].
Personal Injuries: As mentioned above, metaverse uses a combination of VR and AR. Although these technologies may sound similar, there are significant differences between them in terms of the equipment they require and the experience they provide. VR requires headsets that completely take over your vision to create the impression that you are elsewhere. Whereas, AR devices, such as the Microsoft HoloLens, are transparent and allow its users to see everything in front of them, while projecting images over whatever they are looking at. This technology also extends to smartphones with AR apps and games, such as Pokémon Go, which use your phone's camera to track your surroundings and overlay additional information on top of it, on the screen. In simpler terms, virtual reality replaces your vision, whereas augmented reality adds to it [23].
Existing AR games, such as Pokémon Go, show that there is no doubt that metaverse will cause similar or even worse personal injuries. Pokémon Go is a 2016 AR game that can be played on IOS and Android devices. The game uses mobile devices with GPS to locate, capture, train and battle virtual creatures called Pokémon, which appear as if they are in the player's real-world location. The aim is to collect as many different characters as possible and to find them, players must physically walk, bike, or drive around neighbourhoods. Despite the game's popularity, researchers claim that this game caused up to $7.3 billion damage across the United States 148 days after its release, as this smartphone game app has caused car accidents, injuries and even deaths [24]. Taking these possible personal injuries into account, the developer of Pokémon Go, Niantic, requires all players to agree to their terms of use, which contain a disclaimer that waives Niantic's liability in the event of an accident, injury or damage. Users will not be allowed to play unless they agree to these terms of use. Further, the disclaimer contains a binding arbitration clause, which aims to prevent players from bringing a lawsuit in court against Niantic [25].
Similar to Pokémon Go, metaverse requires the use of a head mounted device, thus the user cannot see the real environment that they are in, which makes it probable for users to trip over objects, fall down a set of stairs or through a window, hit a wall or even people around them, which may cause serious physical injury to the user and those surrounding them. In addition, it has been reported that "the metaverse can be so real and scary that 30% of participants could not make it across a room with a simulated tightrope walk between the twin towers, so there may even be a few heart attacks" [26]. Further, metaverse may cause personal injury to the mind, as users may unknowingly access areas with flashing lights and/or imagery that may cause discomfort and/or seizures for those with photosensitive epilepsy, and even personal injury to emotions, as exposure to violent imagery may traumatize users and even result in post-traumatic stress disorder [27]. Thus, unless the terms of use of virtual reality platforms contain a similar waiver of liability, lawsuits for negligence and product liability against metaverse developers will become unavoidable.
CONCLUSION
The metaverse undoubtedly creates many opportunities. However, governments and lawmakers must take initiative, and adapt to the emergence of new technologies to prevent the aforementioned legal issues. For instance, the European Commission (EC) has already proposed the Digital Services Act (DSA), a new piece of legislation that aims to increase the transparency and safety for users in online environments, while allowing digital businesses to grow. Moreover, Canada has also proposed a new data privacy legislation entitled "An Act to enact the Consumer Privacy Protection Act and the Personal Information and Data Protection Tribunal Act and to make consequential and related amendments to other Act".
SOURCES
[1] https://about.fb.com/news/2021/10/founders-letter/
[2] ibid.
[3] https://www.singaporelawwatch.sg/Headlines/the-metaverse-is-not-above-real-world-law-opinion
[4] ibid.
[5] ibid.
[6] https://www.thesun.co.uk/tech/6507593/what-is-cookie-internet-accept-info-decline-delete-cookies-explained/
[7] https://www.washingtonpost.com/technology/2021/09/23/iphone-tracking/
[8] https://www.nortonrosefulbright.com/en-us/knowledge/publications/5cd471a1/the-metaverse-the-evolution-of-a-universal-digital-platform
[9] https://www.dataprotectionreport.com/2022/01/privacy-in-a-parallel-digital-universe-the-metaverse/
[10] https://www.pwc.ch/en/insights/regulation/legal-compliance-metaverse.html
[11] https://www.nortonrosefulbright.com/en-us/knowledge/publications/5cd471a1/the-metaverse-the-evolution-of-a-universal-digital-platform
[12] https://www.pwc.ch/en/insights/regulation/legal-compliance-metaverse.html
[13] https://www.businessinsider.com/fungible-meaning
[14] https://www.bbc.com/news/technology-56371912
[15] ibid.
[16] ibid.
[17] ibid.
[18] https://www.whitecase.com/publications/alert/rise-nfts-opportunities-and-legal-issues
[19] https://www.nytimes.com/2021/12/30/technology/metaverse-harassment-assaults.html
[20] https://www.theguardian.com/commentisfree/2021/dec/18/metaverse-new-venue-sexual-harassment-facebook
[21] https://www.independent.co.uk/tech/meta-personal-boundaries-metaverse-sexual-harass-b2007878.html
[22] https://www.independent.co.uk/tech/meta-personal-boundaries-metaverse-sexual-harass-b2007878.html
[23] https://sopa.tulane.edu/blog/whats-difference-between-ar-and-vr#:~:text=The%20distinctions%20between%20VR%20and,while%20VR%20is%20completely%20virtual&text=VR%20requires%20a%20headset%20device,only%20enhances%20a%20fictional%20reality
[24] https://news.sky.com/story/death-by-pokemon-go-game-caused-up-to-7-3bn-damage-claim-researchers-11146310
[25] https://www.hshlawyers.com/articles/pokemon-go-personal-injury-safety-issues-and-liability/
[26] https://www.forbes.com/sites/schuylermoore/2021/12/22/law-in-the-metaverse/?sh=df6aec045d13
[27] https://www.computerweekly.com/feature/A-legal-minefield-called-the-metaverse
Istanbul
Barbaros Mah, Varyap Meridian C Blok
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T: +902165101260
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T: +442045772620
info@guden.av.tr
Barbaros Mah, Varyap Meridian C Blok
D: 172 Ardıç Sok. 34746, Ataşehir
T: +902165101260
London ( in association with Guden Solicitors)
50 Long Acre, London, WC2E 9JR
T: +442045772620
info@guden.av.tr
CONTACT FORM