It may represent the future of digital technology, but the metaverse will be subject to strict rules which, if broken, could result in potentially billions of pounds in fines for the tech giants who create it, experts in the UK have said.
Lorna Woods and William Perrin, two architects of the UK government’s upcoming Online Safety Bill, warn that technology companies like Meta (formerly Facebook) won’t be able to use the metaverse to escape regulation, according to a PYMNTS article.
The article quotes from their interview with the FT: “The feeling is that Meta has moved the debate on to a new type of service that avoids regulation. But that isn’t the case at all in our view. The Online Safety regime applies.”
According to the PYMNTS article, the Online Safety Bill, which the UK government plans to publish in the first quarter of 2022, charges technology companies with a duty of care on their online platforms and requires the removal of illegal content. In the case of “high-risk, high-reach” services like the metaverse, this rule could extend to online content considered to be lawful yet harmful.
Significantly, Ofcom, the UK regulator for the broadcasting and telecoms sector, is set to become the designated regulator of metaverse services under the measures, with powers to enforce platforms’ codes of practice.
Laying down the law
Meanwhile, in signs that the EU’s stance towards the metaverse is also toughening, a Reuters article reports that Margrethe Vestager, executive vice president of the European Commission and the bloc’s antitrust head, says that Europe’s authorities need to better understand the metaverse before deciding how to regulate it.
"Everything we do [regarding regulating it] must be fact-based and based on the information that we can get,” she reportedly said in an online event.
Looming threats of more regulations have severely hampered Meta’s profitability and contributed to a perfect storm of recent issues surrounding the embattled company.
An article for The Motley Fool reports that Meta’s share price fell 6% on 7 February and continued to slide following comments the company made indicating it could shut down Facebook and Instagram in Europe in response to new EU regulations.
This was in addition to Meta’s lackluster fourth-quarter financial results and the announcement that Peter Thiel, one of Facebook’s earliest investors and a key member of the company’s board of directors since 2005, would not be standing for re-election.
Brave new worlds
Having reportedly increased metaverse-related revenue by 22% in Q4 2021, after re-branding to Meta earlier that year, it’s clear that the company formerly known as Facebook has its sights firmly set on becoming the dominant player in the emerging virtual reality sector.
Viewed as the future successor to the internet, the metaverse is (or will be, as it doesn’t exist yet) a “collective virtual shared space, created by the convergence of virtually enhanced physical and digital reality”, according to Gartner. The idea is to create one persistent, enhanced immersive online experience, accessible from anywhere and through any type of device, where activities that previously took place in isolated environments – like attending a virtual event or buying digital property – can happen in tandem.
New research from Gartner predicts that by 2026, 25% of people will spend at least one hour a day in the metaverse for anything from work and education to entertainment and socialising. Since the idea is for no single entity to own the metaverse, it is expected to have a virtual economy based around digital currencies.
Describing the implications of the metaverse for business, research vice president at Gartner, Marty Resnick, says “enterprises will have the ability to expand and enhance their business models in unprecedented ways by moving from a digital business to a metaverse business”.
Despite its potential upsides, the metaverse presents regulatory challenges that are potentially far greater even than those relating to the hundreds of millions of posts, images and content uploaded to sites like Facebook and Instagram every day.
Outlining the challenge faced by regulators, Woods, who is a professor of internet law at the University of Essex, is quoted as saying in the FT article: “The big caveat is we don’t know what the metaverse is, so it’s based on our best guess of what it might look like.
“We need to think about what mitigations or solutions look like that are different in the metaverse, particularly in real time, compared to text or image-based static platforms.”