The “metaverse” seems to be the latest buzzword in tech. In general terms, the metaverse can be viewed as a form of cyberspace. Like the internet, it’s a world – or reality, even – beyond our physical world on Earth.

The difference is that the metaverse allows us to immerse a version of ourselves as avatars in its environment, usually through augmented reality (AR) or virtual reality (VR), which people are and will increasingly be able to access using tools like VR goggles.

While it all seems very exciting, a curious lawyer like me is inclined to ask: who or what governs the metaverse? The way I see it, there are three key areas which, at this stage, are legally murky.

1. A boundless marketplace

Transactions in the metaverse are generally monetised using cryptocurrency or NFTs (non-fungible tokens). An NFT is a unique digital asset: it could be an image, a piece of music, a video, a 3D object, or another type of creative work. The NFT market is booming – in some cases we’re talking about sales equivalent to millions of pounds.

While it’s difficult to say whether this is simply a trend, or a new and exciting form of capital investment, these kinds of transactions raise some interesting legal questions.

For example, in the “real” world, when it comes to purchasing a piece of art, property law dictates that ownership is two-fold. First, ownership can be attributed in the actual physical art work. And second, the buyer may or may not own the intellectual property of the art work, depending on the terms of the sale.

But what kind of ownership is precisely included in a transaction of digital art? International law firm Reed Smith has said that “ownership” in the metaverse is nothing more than a form of licensing, or provision of services. In such instances, true ownership still lies with the owner. This may mean, for example, that the buyer cannot sell the item without permission from the true owner.

Virtual real estate has also become an NFT, with individuals and companies spending enormous sums to own a “property” in the metaverse. Do the intricacies of land law apply here? For example, will real-world legislation cover trespassers on private land in the metaverse? Can you take out a mortgage on your virtual property?

The metaverse may also be susceptible to hosting a virtual marketplace somewhat like Silk Road, which was a dark web marketplace dealing in illegal drugs, weapons and, allegedly, “murder for hire”. What kinds of laws can be put in place to safeguard against this happening in the metaverse? It would be ideal to have a global regulatory authority overseeing the metaverse, although this would be difficult to implement.

2. Data

Another possible legal implication of the metaverse is around data and data protection. The metaverse will expose new categories of our personal data for processing. This might include facial expressions, gestures and other types of reactions an avatar could produce during interactions in the metaverse.

The EU’s General Data Protection Regulation (GDPR) could arguably apply to the metaverse, as could the UK’s Data Protection Act. But given the novel nature of the metaverse, to ensure that users’ rights are protected, the processes governing informed consent around data processing may need to be revisited.


Leave a Reply

Your email address will not be published. Required fields are marked *