According to researchers from Oxford (Oxford Corpus), the concept of metaverses in 2022 took the second place in terms of frequency of use and significance. By this term, linguists understand a hypothetical virtual reality environment in which users interact with each other’s avatars and their surroundings in an immersive way. The first recorded use of the term “metaverse” in the Oxford Dictionary dates back to 1992. The term was used by Neal Stevenson in the science fiction novel Snow Crash.
After 30 years, it can be stated that the metauniverse has entered social life, economics and law. For example, in 2022, the world’s first mortgage loan was issued for housing in the Decentraland metauniverse. In October 2022, Gartner analysts published a report on strategically important technology trends for the near future. One of the ten technologies that affect the efficiency of business processes, they attributed the technology of the metaverse. According to analysts, the virtual economy based on digital assets is expected to grow significantly, and by 2027, 40% of companies will use a combination of Web3, cloud-based augmented reality and digital twins. And of course, this will require from digital law a comprehensive legal regulation of the technology of the metaverse, which is absent today as a phenomenon.
Legal Perspective of Metaverse
However, before that, it is necessary to determine what should be attributed to this object of legal regulation. Foreign legal science understands the metaverse as interconnected virtual environments controlled by movements using electromyography (EMG) and neural interfaces.
In domestic scientific publications, the term “metaverse” is also found, but it is only mentioned in connection with the regulation of other objects of law, for example, when analyzing the possibilities of inheriting digital assets or when studying issues of protecting the rights of gamers. The term is not used in domestic legislation, but some by-laws mention technologies of virtual reality (virtual reality, VR) and augmented reality (augmented reality, AR).
Need for Comprehensive Legal Regulation of Metaverse
In the absence of the concept of “metaverse”, it is impossible to compose the concept of legal regulation, which, in turn, leads to the dominance of “digital Luddism”. A striking historical example of such regulation is the adoption in Great Britain in 1865 of the Locomotive Acts. According to one of the provisions of this legal act, during the movement of any car, an individual had to walk in front of him on foot for at least sixty yards and carry a red flag, warning of his approach. There is no doubt that the legislator, in adopting this provision, proceeded from the desire to protect the rights of citizens. It is also obvious that the norm has reduced the competitiveness of road transport. According to some authors, this has led to a significant technological lag of the country in this area from other European countries.
Metaverse Law as an Emerging Field
In the English version of Wikipedia, metaverse law is already listed as an independent section of jurisprudence, although there is still no common idea about its content. Today, scientists, lawyers and practitioners, as well as non-profit organizations, are engaged in research on this issue. For example, in the United States, the Metaverse Policy Institute has been operating since 2021, which aims to create the first law on metaverses, which will ensure the country’s leadership in this area. The Institute understands this digital technology as a projection of virtual worlds, including virtual reality (VR), augmented reality (AR), mixed reality (MR) and new concepts such as hyperreality.
Classifications of Metaverse
There are other classifications as well. Seoul-based Dentons Senior Partner Yang-Han Lee points out that there are four types of metaverses: Augmented Reality, Life Logging, Mirror Worlds, and Virtual Worlds. Their most successful models are Zepeto, Roblox, Gather and Decentraland.
As the main legal relations in the metauniverse, Yang-Khan Lee identifies:
- engaging users in income-generating activities by selling homemade avatars or games to other users;
- generating real income by using the metaverse as a channel for advertising, promotions, marketing and training;
- trading digital assets using non-replaceable tokens (NFTs).
Economic Activities within Metaverse
However, this classification is not ideal, since the emphasis in it is on economic activity in the metaverse, and the issues of legal regulation of the dissemination of information and the protection of confidential data have remained outside the attention of lawyers.
Today, two approaches to the regulation of the metauniverse can already be distinguished:
- the countries of Southeast Asia are taking real steps to form legal institutions to regulate the metaverse;
- the countries of Europe and North America rely on the expansion of existing norms and the self-regulation of metaspace.
Regulation Approaches in Metaverse
This division is rather arbitrary, since most countries try to use both methods of legal regulation. For example, in October 2021, the first industry organization for the regulation of the metaverse was established under the China Mobile Communications Association. Which adopted the Metaverse Industry Declaration, which includes the following principles:
- citizen orientation;
- creating a positive image of digital life;
- optimization and modernization of the digital economy in the new infrastructure of the metaverse;
- encouraging the creation of new opportunities for the subjects of the metaverse;
- creating an ecology of data value in the metaverse;
- formation of the principles of open cooperation for the construction and development of the metauniverse.
National Legislation Examples
In the UK, for example, there is already a Web Security Bill designed to regulate legal relationships in the metaverse, including intellectual property, asset ownership, smart contracts, consumer protection, privacy protection, labor rights protection and other public relations. And, say, the United States does not have legislation that mentions the metaverse as an object of law. But there are a number of regulatory legal acts that the creators and users of digital technology must take into account.
These are, for example, state and federal business laws, including gambling laws, money transfer laws, securities laws. Unfair and deceptive trading practices, cybersecurity, antitrust, copyright, laws on stored messages and even the Fourth Amendment. Which defines protection against unlawful search and confiscation of property, etc. Of course, all of the above legislation constitutes the “right of the metaverse”. But its effective use requires the adaptation of existing norms to the architectural features of the digital technology they regulate.
In domestic judicial practice, it is advisable to proceed from the fact that the metauniverse at the current stage of development repeats the technology of social networks. In this regard, we note the following fact: potentially. For the law of the metaverse, the problem of unscrupulous social engineering will be more acute than for social media. It is clear that a ban on social engineering is unacceptable. Because with its positive use, unique opportunities are created for prompt response to the needs of society by the authorities.
Identification
For example, the analysis of information posted on social networks already makes it possible to identify:
- natural phenomena – natural disasters, earthquakes, meteorological events, precipitation;
- suspicious events – crimes, violent actions, protest actions, behavior arousing suspicion of terrorist intent;
- health events – morbidity, drug use, recreational activities;
- accompanying events – emergencies, crises, rumors, cyber attacks;
- traffic events;
- other events — sports events, sub-events, real-time events.
The use of this technology in the metaverse will make it the most accurate and effective social detector, allowing you to quickly respond to negative and positive events. For example, an analysis of the behavior of an individual may indicate an inclination to commit an illegal act, and the study of his behavior in the metaverse will reveal his inclinations and internal motives, the impact on which will help to persuade an individual to lawful behavior. The question of the ethics of such an impact remains open, but there is no doubt that if the society accepts such manipulation to sell goods, works and services to it, then social engineering to ensure public order will not cause universal condemnation.
National Approaches to Metaverse Regulation
For example, in October 2021, the first industry organization for the regulation of the metaverse was established under the China Mobile Communications Association, which adopted the Metaverse Industry Declaration, which includes the following principles: citizen orientation; creating a positive image of digital life; optimization and modernization of the digital economy in the new infrastructure of the metaverse; encouraging the creation of new opportunities for the subjects of the metaverse; creating an ecology of data value in the metaverse; formation of the principles of open cooperation for the construction and development of the metaverse.
In the UK, for example, there is already a Web Security Bill designed to regulate legal relationships in the metaverse, including intellectual property, asset ownership, smart contracts, consumer protection, privacy protection, labor rights protection and other public relations. And, say, the United States does not have legislation that mentions the metaverse as an object of law, but there are a number of regulatory legal acts that the creators and users of digital technology must take into account.
Adapting Existing Laws to Metaverse
These are, for example, state and federal business laws, including gambling laws, money transfer laws, securities laws, unfair and deceptive trading practices, cybersecurity, antitrust, copyright, laws on stored messages and even the Fourth Amendment. Which defines protection against unlawful search and confiscation of property, etc. Of course, all of the above legislation constitutes the “right of the metaverse”. But its effective use requires the adaptation of existing norms to the architectural features of the digital technology they regulate.
Relation of Metaverse to Social Networks
In domestic judicial practice, it is advisable to proceed from the fact that the metaverse at the current stage of development repeats the technology of social networks. In this regard, we note the following fact: potentially, for the law of the metaverse. The problem of unscrupulous social engineering will be more acute than for social media.
Metaverse as a Social Detector
It is clear that a ban on social engineering is unacceptable. because with its positive use. Unique opportunities are created for prompt response to the needs of society by the authorities. For example, the analysis of information posted on social networks already makes it possible to identify: natural phenomena – natural disasters, earthquakes, meteorological events, precipitation; suspicious events – crimes, violent actions, protest actions, behavior arousing suspicion of terrorist intent; health events – morbidity, drug use, recreational activities; accompanying events – emergencies, crises, rumors, cyber attacks; traffic events; other events — sports events, sub-events, real-time events.
The use of this technology in the metaverse will make it the most accurate and effective social detector. Allowing you to quickly respond to negative and positive events.
Economic Activities in Metaverse
For example, an analysis of the behavior of an individual may indicate an inclination to commit an illegal act. And the study of his behavior in the metaverse will reveal his inclinations and internal motives, the impact on which will help to persuade an individual to lawful behavior. At the first stage, metaverses involved in economic activity, i.e.. Creating objects of information rights and ensuring the circulation of such digital assets, are subject to regulation.
Domestic Legal Challenges
At the first stage, metauniverses involved in economic activity, i.e., creating objects of information rights and ensuring the circulation of such digital assets, are subject to regulation. In 2021, Juniper Research conducted a study that showed that the global market for loot boxes (from the English loot – “loot in the game”) is 15 billion US dollars. And by 2025 it will reach 20 billion US dollars, growing by 5 % annually. The share of the Russian Federation accounts for 1.5% of this amount [14].
Even such modest figures allow us to talk about the emergence of a new digital asset market. Where individuals and legal entities receive income from the resale of game items. This requires the regulation of legal relations in various branches of domestic law, such as tax law. Currently, the taxation of transactions with digital assets is causing litigation. For example, the Mail.Ru Games company, having received income from the sale of additional functionality in video games (armor, weapons, etc.). did not pay value added tax on these proceeds, applying the right to a tax deduction when exercising the rights to use programs under license agreements. The Tax Inspectorate charged VAT, considering these objects not related to software. This argument was supported by the Moscow Arbitration Court,
Reality systems
Virtual and augmented reality systems are a hallmark for separating the social network and the metaverse. However, today most of the metaverses allow users to participate in their lives without this equipment.
Based on the above arguments, we propose to use the following definition: Metaverse is an information system that exists in the form of a digital platform and/or a social network that provides the ability to create and transfer digital rights between users, for access to which an individual can use information technologies of virtual and/or or augmented reality, as well as projecting virtual objects into reality.
It seems that the legal consolidation of such a definition will be the first and necessary step for the formation of a new sub-institution of digital law – the law of the metaverse.