3 Inevitiable Metaverse Legal Problems


Here’s how Web3 can tackle rights, privacy, and intellectual property 

Data Source: Footprint Analytics  

Previously, we discussed differing opinions about the Metaverse. While many people are excited to see a more decentralized and anonymous version of the internet, others note the legal conundrums that will inevitably ensue. 

For example, some projects, like Arweave, aim to make blockchain data censorship-resistant, which might make it difficult to enforce decisions to remove content if this kind of tech is applied in the metaverse. 

Others, like Secret Network, may spawn apps that enable criminals to communicate and conduct financial transactions untraceable, forcing authorities to scrutinize technology that is otherwise used by law-abiding individuals who care about their privacy. 

Most existing laws around the world cannot be applied directly in the Metaverse, and solutions are—at this point—highly speculative. In this article, we’ll explore the main legal issues in the Metaverse: Who will protect users’ rights, privacy, and intellectual property, and how?  

  • Individual Rights

As it currently exists, the Metaverse is defined by games and environments where players create virtual avatars. 

Thanks to the anonymity of blockchain, users can create dozens or even hundreds of untraceable digital avatars. For example, in Decentraland, every MetaMask address can create a new avatar.

Obviously, these characters do not themselves have individual rights, but the people controlling them do. 

The best precedent for Metaverse games are MMORPGs like World of Warcraft and Runescape, and perhaps universe-builders like Roblox and Minecraft. 

The current law is not clear on the issue of individual rights in games but rather treats virtual avatars as the virtual property of the game account controller.

Obviously, when holograms and sensing technologies are perfectly used in the Metaverse, the act of contact between virtual avatars will reach the real-world people themselves. For example, in the case of sexual harassment in the Metaverse, people in the real world would feel the same sexual shame.

In November 2021, Meta launched the Beta version of Horizons Worlds. One of the female players claimed to have been sexually harassed. There is no way to hold the perpetrators accountable.

It may ultimately make Meta to make [the Safezone] trivially easy and findable, but the female player can’t be protected by law.

Legal Problems

                                         

Therefore, if the Metaverse continues to develop, how people exist in the Metaverse must be resolved to clarify the relationship between rights and obligations.

  • Privacy

Everything in the Metaverse exists in the form of data on the blockchain or other cloud storage. Tech firms that hold data have significant legal requirements related to privacy and protection.

In real life, when we use a service, we authorize technology companies to collect our personal information and private data, including identity information, cell phone numbers, etc. 

However, the Metaverse will likely collect more comprehensive data to refine the virtual avatars and enhance the immersive experience.

This could include fingerprints, voiceprints, physiological responses, and even brain wave data. 

Nowadays, technology companies do not protect users’ private data as well as they should, with leaks being a regular occurrence, despite the legal framework that specifically tries to address this. For example: 

  • In 2018, Meta (Facebook) was fined $5 billion by the U.S. Federal Trade Commission (FTC) for leaking user privacy to Cambridge Analytica.
  • In 2021, B2B marketing company OneMoreLead stored user data in an open database, resulting in a breach of approximately 63 million users’ data.
  • In 2021, T-Mobile, a subsidiary of Deutsche Telekom, suffered a cyberattack that compromised the personal data of more than 47.8 million subscribers.
  • Intellectual Property

In shaping the Metaverse, technology companies are bound to import things from the actual world, such as iconic buildings, famous paintings, or likenesses of real people. What if there is no authorization to use these things?

Since the Metaverse will include a lot of user-generated content, it will greatly complicate IP law. 

If the content produced by users is unlicensed, how should the ownership of the content be determined? Please see “Intellectual Property Rights” for a detailed analysis.

How should ownership be determined if users produce content in the Metaverse with stolen ideas? The current law stipulates that virtual property should be protected, but whether the content created in the Metaverse is virtual property under the current law is open to question. In other words, the relevant laws are yet to be made. 

Summary 

The development of the metaverse is a massive social project requiring long-term cooperation across multiple industries and legal frameworks. If metaspace is properly utilized, it may lead to a better, more connected version of the internet. If not, users and creators alike will be hindered by legal ambiguity for years to come.

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