Fri. Nov 25th, 2022

The term “metaverse” has become a hot topic in the tech industry. It is possible to think of the metaverse as a kind of cyberspace. As with the internet, it’s a world or reality that exists outside of our own.

However, in the metaverse, we can use augmented reality (AR) or virtual reality (VR) tools like VR goggles to immerse ourselves in its environment as a version of ourselves as avatars. I am a curious lawyer who wonders who or what governs the metaverse, despite how exciting it all seems. According to my assessment, three key areas remain legally unclear at this time.

1. There is no limit to the number of buyers and sellers in the world

Transactions in the metaverse are typically monetized with cryptocurrency or NFTs (non-fungible tokens). In the digital world, an NFT can be anything from a picture to a song to a video to a 3D model or any other kind of creative work. The NFT market is booming, with sales reaching millions of pounds in some cases.

These kinds of transactions raise a number of interesting legal questions, even if it’s difficult to tell whether this is a trend or a new and exciting form of capital investment.

As an illustration, in the “real” world, property law mandates that ownership of a work of art be shared by the buyer and the seller. As a starting point, physical ownership can be assigned. The buyer may or may not have ownership of the artwork’s intellectual property, too.

But what exactly is included in a digital art transaction in terms of ownership? “Ownership” in the metaverse is nothing more than a form of licencing or service provision, according to international law firm Reed Smith. In these cases, the true owner retains ownership. A buyer may be unable to resell the item without the owner’s consent, for example.

Read on to find out if the metaverse has a new killer app. So we don’t have to go there, make AI avatars of ourselves and put them there.

Individuals and corporations alike are shelling out large sums of money to acquire a “property” in the metaverse. Do the complexities of land law apply to this situation? Can trespassers on private property in the metaverse be prosecuted under the same laws that apply in the real world? Does your virtual property have the ability to be financed?

The dark web marketplace Silk Road, which sold illegal drugs, weapons, and allegedly “murder for hire” on the dark web, may be able to host a virtual marketplace in the metaverse. Is there anything that can be done to prevent this from happening? If possible, a global regulatory body should oversee the metaverse, but it is difficult to do so.

Insights

The metaverse may also have legal ramifications for the handling of data and the protection of personal information. In the metaverse, new categories of our personal data will be made available for analysis. This could include facial expressions, gestures, and other types of reactions that an avatar might display during interactions in the metaverse.

The European Union’s General Data Protection Regulation (GDPR) and the Data Protection Act of the United Kingdom (DPA) could theoretically apply to the metaverse. As a result of the metaverse’s novel nature, informed consent processes may need to be revisited to ensure that users’ rights are protected.

An image depicting two Avatars Shaking Hands

New types of personal data will be revealed as people interact in the metaverse. Photographer: Athitat Shinagowin

In addition, because the metaverse has “no borders,” we may need to clarify the GDPR’s provisions on data transfer and processing outside the EU, even if we assume it will apply. A person’s home country or citizenship has no bearing on whether they are subject to the GDPR or not.

Considering that the avatar’s data will be processed, should we look at the location of the person using it, or at the avatar itself? How would we know which jurisdiction the metaverse belongs to if we looked at the avatar’s location?

3. User-to-user interactions

We may encounter situations in which avatar-to-avatar interactions result in a violation of the law, if this were the case in the real world. Tort law (which encompasses civil claims such as negligence and nuisance) or criminal law could be violated in such instances (involving illegal acts and crime such as assault, murder, burglary or rape).

Imagine a fight between two avatars. Is it possible to prosecute this under the criminal code’s assault and battery provisions? Is there a way to hold an avatar accountable for their actions in the virtual world? This would be difficult because we would have to give the avatar a legal persona, allowing them to sue or be sued in a legal system and grant them rights and duties within that system.

Because “actual bodily harm” is typically required to establish an assault or battery, proving the crime would be more difficult. There will be no actual bodily harm in the metaverse. An avatar would be difficult to prove harm, loss, or injury.

Here we are, but should Meta really be setting the ethical ground rules for “virtual influencers?”

Unfortunately, sexual predators in the metaverse are already emerging and hiding behind avatars that are difficult to identify in the real world. We’ve seen groping, for example. Wearing a haptic vest or other similar technology in the metaverse allows users to actually feel the sensations of being touched or groped.

Physical contact is not required to violate a state’s sexual harassment law. However, are current laws sufficient to address this issue? Who bears the responsibility for ensuring the safety of users in the VR and gaming environments, for example?

Unscrupulous users may take advantage of the fact that sexual harassment is a murky area in the metaverse. That their actions cannot be proven or held accountable for events taking place in the metaverse may encourage such behaviour.

We are back to the issue of avatar legal personas – do we really need one to hold avatars accountable for their metaverse deeds? To be able to tell the difference between a “legal” avatar and the real person behind it, what standards and criteria must be in place? All of these concerns should be addressed prior to the metaverse becoming widely accepted.

By Adam

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