As technological advancement continues to shape the way people interact and consume digital content, the concept of the metaverse is gaining much attention. The metaverse, defined as a shared virtual world accessible through the internet, has not yet called for any regulatory steps. EU antitrust chief Margrethe Vestager has recently presented an initiative to guide competition regulators in understanding and taking part in the industry.
The initiative, proposed by Vestager, has two primary components. Firstly, it proposes a toolbox featuring guidelines on ways to participate in the metaverse and combat counterfeiting. Secondly, it proposes the introduction of regulatory sandboxes that would create open and interoperable virtual worlds and thereby prevent the rise of a few dominant companies. Speaking in anticipation of the initiative, Vestager said “We see a lot of innovation when it comes to virtual worlds. I don’t think that any company can claim that they will own it, so to speak but that is what we hope to find out.”
A core concept of the initiative looks to establish a ‘Web 4.0’, which is “powered by open and highly distributed technologies and standards that enable interoperability between platforms and networks and freedom of choice for users”. Major tech platforms such as Facebook, Microsoft and Apple have all been investing in the development of metaverse products, which has created a cause for concern amongst smaller companies such as Roblox who fear being at an unfair disadvantage.
Ultimately, Vestager believes that the EU has a sound regulatory framework in place and that there is no need for premature regulation when it comes to the metaverse. According to her, “we do have time to explore, to know that we should not jump to regulation as the first sort of safety pad. We should really be careful because now there will be a lot of work to be done to implement, both for the Commission but also for member states.”
Despite the falling trend in VR/AR investment which has seen a decrease from $18.9 billion in 2021 to $5.8 billion in the current year, the EU remains content with operating on its existing regulatory framework. The toolbox that Vestager proposes is seen as the main source of guidance for those participating in the metaverse, along with the proposed introduction of regulatory sandboxes.
However, the significance of the toolbox does not come without challenges. The toolbox requires implementation and enforcement, both of which are long and laborious processes. As the metaverse industry continues to grow and evolve, the EU may be forced to confront the need for a policy update or amendment in the near future.
Although the immediate idea of legislation seems to be put on the backburner for now, Vestager’s initiative works as a pillar of support to enable growth and creativity within the framework of the existing laws. The initiative also provides a breath of relief to smaller companies that otherwise would have noSay in the reigning of the industry. It will be interesting to see how the metaverse industry fares amidst this evolving regulatory backdrop.