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Law and order in the Metaverse: legal expert warns how you could be at risk

In the fast-evolving world of Web 3.0 current laws and regulations are struggling to keep up, leaving some risky grey areas a legal expert has warned.

With data gathering and processing on a never-before-seen scale, increasingly sophisticated AI and almost limitless anonymity, the Metaverse presents some very real risks and a demand for current laws to catch up.

Paddy Grant, Senior Lecturer in Legal Innovation and Technology at The University of Law, explains: “Although existing regulations go some way towards maintaining order and morality in the Metaverse, this whole new world is presenting new challenges and considerations all the time. There are certainly many grey areas, leaving us with something of a ‘wild west’ where users could, in theory, get away with crimes that would be easily punishable in the real world.

“Although challenging, this is an exciting time for lawmakers and legal technology professionals, as we’re at the forefront of a huge shift in the industry.”

The so-called Metaverse has come about in recent years, referring broadly to online worlds with which users can interact. These virtual worlds can include Augmented and/or Virtual Reality, or more recently some online games have started to refer to themselves as the Metaverse.

The creation of these new worlds sets up whole new societal structures, which need to be governed by laws to protect users and the creators. However, as Paddy warns, our current laws may not be quite up to scratch yet.

“The concern is that we’re moving into a whole new territory that we have never seen before. Of course, we can reference current laws and use them as a guide, but we’re starting from scratch and discovering new challenges and hypothetical scenarios all the time. The technology is advancing quicker than our ability to govern it with law, which means we’re reliant on existing laws to do the job. A lot of the time this works but it certainly leaves a lot of grey areas where users could find themselves at risk.”

Paddy explains the key areas to be aware of in an online world:

Privacy and data protection

Arguably the most prominent and valid concern in the digital world is that of privacy and data protection. User data is being collected at a scale that hasn’t been seen before, with everything from online behaviour and personal information through to biometrics up for grabs.

With the vast amount of user data being processed in web 3.0, identity theft has perhaps never been a more ominous threat. There are already cases of user’s fingerprints being sold on the dark web, which can then be used to fool biometric identification systems[i].

Data in the Metaverse is infinitely more valuable and could be much more vulnerable when moved between applications. We’re already seeing platform operators investing more heavily in creating more robust privacy policies, which is very likely to continue along with a growing mistrust in big tech companies.

Intellectual property

A prominent issue for creators and brands alike, intellectual property and trademark law is a complex area in the online world. With the anonymity of avatars, along with a lack of clarity around what constitutes “fair use” and “goods” in the Metaverse, copyright infringement is becoming increasingly common.

If you’re operating in the online world and creating work similar to that of designers or artists, do tread carefully. In 2022, French designer Hermés was able to sue one creator for creating digital duplications of the iconic Birkin bags and won the case[ii].

Defamation

Continuing with the issue of anonymity, defamation laws are also under the microscope in the online world.

With users hidden behind Avatars, it becomes challenging to define exactly how one person may have defamed another if both are virtual characters. With anonymity on both sides, one could argue that a defamatory statement hasn’t harmed anyone’s character, which in theory could mean it isn’t punishable. 

Harassment

Online harassment is sadly nothing new, so this is certainly something we can expect to see continue and evolve as life is increasingly online. Many are continuously monitoring this evolution to try and regulate it, however with the infinite nature of the Internet it will be an ongoing challenge.

One particular concern surrounds blockchain. With all interactions in the Metaverse based on blockchain, a transparent information sharing system, it could be possible to follow everything a person does based on just one interaction with them.

There isn’t currently a robust way of policing this, which creates very valid concerns for users and platforms alike.

 

[i] https://www.europol.europa.eu/cms/sites/default/files/documents/Policing%20in%20the%20metaverse%20-%20what%20law%20enforcement%20needs%20to%20know.pdf

[ii] https://www.reuters.com/business/hermes-wins-permanent-ban-metabirkin-nft-sales-us-lawsuit-2023-06-23/