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THE LEGAL NET OF METAVERSE

Author: Duvvuru Sravya Reddy, III year of B.B.A.,LL.B. from IFIM Law School


Abstract

As we see it, the future of the internet is here. Remember when making video chats on a handheld device felt like science fiction a decade ago? Well, everything just became much more actual. Nowadays, we use virtual spaces for business meetings and family get-togethers. Virtual world become a part and parcel in life , especially after the COVID - 19 pandemic. People became more used to get things in hand without even moving leg for single inch using the modern technology.


WHAT IS METAVERSE?

Metaverse is a 3D technology, which is a combination of different virtual worlds. It can simply be understood as future version of internet. Metaverse is a quick developing idea. This concept of metaverse is still under construction. Speaking of Metaverse now, is just like speaking of internet in 1960s. Metaverse is a evolving virtual social platform.


Humanity has already made a start in this direction in the real world during the COVID-19 epidemic, with schooling moving online and virtual meetings replacing corporate travel on a scale that has never been thought possible. A lot of individuals also think that the metaverse's growth represents the Internet's natural transition from Web 2.0 to Web 3.0. For background, Web 1.0 is sometimes referred to as the beginning of Internet evolution, during which time users mostly consumed content. Users can also use the Internet to produce and exchange content when using Web 2.0, the prevalent paradigm at the moment. With the addition of disintermediation (the eventual elimination of middlemen) and decentralization in Web 3.0, people now have a great deal of autonomy over how they use the Internet.


The term "metaverse" broadly, refers to the movement of numerous aspects of the human experience, from the real world to an immersing virtual environment. The metaverse is fundamentally a clear junction of technology and content. Video games like Roblox and Fortnite, for instance, let players enter a large, sophisticated virtual environment and partake in a wide range of virtual experiences and exchanges, including those with other players from all over the world. Through platforms like Sensorium, users may establish their own alter egos and enter a shared virtual environment, where top DJs perform in front of a sizable audience of other users. In a recent announcement, Facebook introduced Horizon World, a "mixed reality" meeting environment that enables users to take part in meetings in a virtual setting complete with avatars, virtual meeting spaces and tables, and even virtual chalkboards. Utilizing digital characters and other artefacts, players can explore the real environment on some platforms, such as Pokémon Go and Illust Space.There isn't currently a single metaverse experience, despite references to "The Metaverse." Instead, "The Metaverse" refers to a concept that is most likely to be implemented in a number of virtual worlds, where technology has the potential to introduce material to those worlds in previously unimaginable ways, along with problems and legal issues that have never been thought of.


Advantages of Metaverse

1. Minimizes physical distance and connects the world

In some ways, the metaverse will serve as a neutral setting where people can interact as equals. Additionally, it will be simpler and more real to meet individuals who share your interests and viewpoints, allowing you to feel more at ease making new acquaintances while remaining in the comfort of your own home.


2. Improved social interactions through online

Internet wasn't the most interactive experience, but it was the only chance to communicate with other people during the Covid quarantine.In contrast, social interactions and events in the metaverse are far more immersive, enabling users to feel a close connection to their friends and loved ones. In the metaverse, gatherings, events, and performances can all be planned. Any function or family gathering you might wish to attend no longer depends on physical proximity.


3. Modernized social media

The most common phrase in usage over the last ten years is definitely "social media." Twitter and other platforms like Facebook (Meta) rely on the social component of the internet. And there is no doubt that the transition to a three-dimensional virtual environment will be advantageous for them. A very potent combination will allow us to experience social media like never before by fusing the capacity to construct virtual spaces in the metaverse with the potential of social media to create shared online worlds.


4. New marketing strategies

The metaverse will probably offer even more opportunities, similar to how social media has assisted in the creation of several business opportunities and gave rise to a new type of marketing and advertising on its platforms.


With the help of innovative marketing and advertising techniques like virtualized storefronts, curated shows, highly interactive participation, and customer service, the metaverse offers a wholly immersive way to advertise and consume goods and services. This is an alternative to just looking at everything on your phone's little screen. As a result, you may use haptic technology to see, grasp, and even feel the object (experience of touch through vibration, forces, and motion). Both the customer and the business will gain from this form of contact because both sides will have a better user experience.


5. Online education

Learning will be easier than ever thanks to the metaverse. It is no longer necessary to consider the classroom's actual location. In a practical learning setting, people from all over the world will be able to exchange knowledge and study alongside one another in real-time.


Additionally, since we have complete control over what the students see inside the metaverse, visual learning will make it simpler to communicate ideas and concepts. Since historical events would be experienced by the students directly rather than only conceptually, to truly experience life then, picture yourself exploring the streets of ancient Rome.


6. Gaming improvements

The first industry to gain from VR and AR technologies was gaming. In 2021, we saw the emergence of numerous brand-new VR games, and as technology develops, the games get better. This reality is being recognized by many game development studios, and they are starting to integrate their games into the metaverse. Leaders in this industry include Epic, which will invest $1 billion in gaming in the metaverse in early 2021.


Additionally, Meta (previously known as Facebook) renamed the entire business as the pioneer of the metaverse. This is in addition to other well-known businesses like Roblox and Microsoft with their Xbox metaverse.


7. Work environment improvements

The infinite office is a brand-new workspace idea that Mark Zuckerberg mentioned when he unveiled the metaverse. It promises to make working from home the best experience possible by enhancing convenience and boosting general productivity.


New technologies have always been utilised in the workplace. And nothing will change once the metaverse and VR technology are fully developed. It's an intriguing idea that will probably help many people to put on VR glasses and participate in a three-dimensional virtual replica of your workplace from the comfort of your home.


Disadvantages of Metaverse

1. Cybercrimes

Cybercrime is a significant issue that has existed on the internet since its inception. Governments have fought against it for years and invested millions of dollars, which has improved the security of our contemporary internet infrastructure. However, because the metaverse is a relatively new idea, it still lacks these high standards for cyber security. Due to this, it is very susceptible to all kinds of criminal activity, including, but not limited to, fraud, money laundering, child exploitation, trafficking in illicit products and services, and cyberattacks. Governments' limited ability to resist and combat cybercrime is another cause for concern because of the decentralized nature of the metaverse.


2. Negative impact on Cultures

One drawback of bringing everyone so close together and combining all the world's civilizations into one is losing the stunning cultural diversity that exists today. People won't feel linked to their own immediate civilization or the urge to embrace their own local or regional culture if they spend the most of their time in the metaverse. As a result, many long-standing customs that have been part of society since the dawn of time may finally come to an end, and a new civilization, while unifying and all-encompassing, may prove to be boring and uninteresting.


3. Privacy and security issues

People are often unaware that their data is being gathered and sold to advertising, among other things, which has always raised privacy concerns on the internet. The fact that Meta is paving the way for the new metaverse only makes these worries worse. Given their prior experiences with user privacy issues, this is a problem that hasn't gone away just because they changed their name.


4. Addictive

Gaming addiction can develop into a problem. Some claim that because you are totally submerged in a virtual world, there is a higher risk of addiction with the metaverse. Apart from meeting your basic bodily needs like eating and sleeping, you can stay in your VR setup.


Children and teenagers are especially at risk because, according to experts, allowing people under the age of 18 to spend too much time in the metaverse will seriously impair their development.


Furthermore, it could be challenging to distinguish between the real world and the virtual world if one lives in a virtual state. It will be difficult to strike a compromise between limiting adults' and teenagers' access to the metaverse while attempting to prevent addictive behavior.


5. Corporate takeover

When social media first emerged, it was intended to allow users like you and me to create content and engage with that of others. before large businesses seized control. The best example of this is probably when businesses entered the YouTube market and took control away from individual creators. As a result, we saw a shift from amateur, authentic videos to professionally produced and edited videos created by teams of experts.


6. Virtual bullying

The internet has a reputation for being a terrible place where strangers are frequently unkind and intolerant of others' differences. All across the internet, whether it is in social media or games, people engage in malicious behaviour toward others. Despite many initiatives to stop or restrict those actions. These negative actors will gain more control if consumers can experience the metaverse in full 3D on the internet. Because there is no longer a screen to look away from, there are more opportunities for people to attack others, which could leave victims less protected and more exposed.


7. Paves way for decreases physical interactions

How simple it is to lose track of time when you're in the metaverse is one of the main worries that a lot of people have about it. Your senses are essentially impaired, or to put it another way, they are linked to the digital world rather than the physical one. If exposed to the metaverse for an extended period of time, some individuals may lose their sense of connection to reality and even go so far as to deny the existence of any world other than the virtual one.

With the advent of mobile devices, where the average American spends around 5.4 hours per day staring at a screen, we do experience this type of behaviour to some extent today.


The legal net of Metaverse

Data privacy laws in India

Under the Information Technology Act of 2000, a series of regulations known as the Information Technology Rules, 2011, oversee the current data protection system. These regulations state that a business must have information security policies that encompass technological, operational, and physical security measures as well as written security plans to demonstrate code compliance.


In a notification dated February 25, 2021, the government published the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (IT Rules), with the main objective of regulating and safeguarding consumers from various potentially hazardous contents. The company must adhere to exact technological and design requirements in order to meet the standards for data accuracy, choice, consent, disclosure, portability, and security. The firm must also set up management processes to enforce outdated rules, privacy standards, and suggestions that are appropriate for the volume of information needed.


There are five legal and regulatory concerns

  • Privacy & Security Issues

  • Antitrust and competition laws are applied

  • IPR Violations

  • Possession of Responsibility

  • Concerns Regarding Jurisdiction


Anti-trust and Competition laws application

The applicability of current laws has been contentious because of the peculiar nature of the metaverse. Since the beginning of the metaverse, anti-trust has been wrestling with existential questions.


A contract, combination, or conspiracy to obstruct trade, as well as monopolization, attempted monopolization, or conspiracy or combination to monopolize, are all prohibited under the Competition Act of 2002, which enforces antitrust laws. Unreasonable constraints are also forbidden. As a result, this legislation can be used if several apps compete in a market, and one unfairly dominates or poses a threat of doing so.


While the majority of anti-competitive behaviours, that exist in the real world can also exist in some form in the metaverse, the fundamental characteristics of the metaverse and the blockchain make it impossible to identify and crack down on such behaviour, allowing businesses to engage in it with impunity.


Private blockchains can be used by anti-competitive businesses, to exchange commercially sensitive information, like information about prices, among themselves. Only those who have the owner of the blockchain's permission, can access these blockchains. Authorities won't be able to access these messages and, as a result, prosecute such behaviour; however, they may demand such information, in accordance with the applicable laws. In contrast to the existing situation, where authorities can simply inspect enterprises' facilities, to acquire information about such violations.


Intellectual property rights Infringement

Since the creation of the Metaverse, the market for virtual accessories has grown; as people's commitment to their avatars grows, they are more likely to spend real money on virtual fashion accessories for them. Due to how simple it is to copy virtual goods, Metaverse has seen an increase in charges of trademark infringement. Businesses are now worried about their trademarks being used online in addition to on physical products.


While there is now a gap in government regulation that can offer remedies for virtual IPR-infringements, blockchain technology may offer businesses a workaround. Since a blockchain is an everlasting and unchangeable record of data, information entered into it cannot be removed or altered unless a consensus process is applied.


When a company's virtual products or services are available on more than one Metaverse platform, this technology can be deployed. The intellectual property rights in content connected to products and services are incorporated and protected by this technology. Attached are descriptions of the pertinent goods, ownership information, and the range of the pertinent rights. The applications that are legal and illegal for the product can be determined using this information. Furthermore, even if the product switches between platforms, this data remains connected to it during its entire digital life. This allegedly works well to safeguard a brand's intellectual property.


Obligation to Enforcement

Because no single user may alter the data on a blockchain without the consent of other users, as was already mentioned, blockchain technology significantly increases security. Pseudonymity, or the inability to determine a user's real identify even if their virtual identity is known, is another crucial feature of blockchain technology.


Despite these potential benefits, there are also very particular and distinct issues with blockchain technology. For instance, if one virtual character bothers another. Will the harasser be held accountable for their behaviour? Due to the lack of knowledge and application of law in such worlds, law enforcement would be challenging because authorities would be unable to hold anyone accountable for their actions in the metaverse.


Privacy & Security Issues

The Metaverse platform is likely to collect enormous amounts of sensitive personal data given the anticipated number of users. Any AR-VR device's privacy statement will often state that it will collect data on a user's biological characteristics, physical environment, and other private information. Due to the collection of such biometric data, this would be considered "sensitive personal data" under the IT Rules.


The government may issue orders allowing the interception and decryption of data in order to "protect the security, sovereignty, or integrity of the state," as stated in Section 69 of the IT Act. Data in the Metaverse environment can be monitored by the government, and if it is deemed to be against public policy, it can be withheld. The company can also be fined for breaking the rules. Though it remains to be seen how successful this is in practice, it is predicted that the law will inject itself in the metaverse period in a way that strikes a balance between essential rights, including freedom of expression, and the protection of the public interest.


Concerns Regarding Jurisdiction

Given that users of Metaverse are likely to come from a variety of backgrounds, countries, and regions, it is important to consider which country's laws would govern the virtual world and Metaverse ecosystem. In a borderless virtual environment, jurisdiction will be even more ambiguous, which is a major source of worry for many government organizations.


There is still a lot of confusion around the authorities' position on this matter, and none has been provided. The only workable solution is to collaborate and create laws jointly. The regulations must change in reaction to shifting dynamics, adding a variety of measures to address fresh problems and offer the world remedies.


Conclusion

A virtual environment called the metaverse has its own rules. Jurisdiction is my favourite legal issue to discuss in the Metaverse. Think of the opportunities! I'll be bringing the popcorn so I can watch these discussions from the front row.


Real-world laws and substantive laws are similar, but not the same. Knowing which laws apply to Metaverse is crucial if you intend to engage in behaviour that is prohibited in the real world. These are only a few of the most prevalent categories of legislation that are applicable in the Metaverse.


In conclusion, the danger for Metaverse users is increased because there are currently no explicit regulations in India that control Metaverse in a reasonable manner. There is a legal gaping hole in front of us when it comes to assuring the security operation of this new platform. If regulators wait, it will be more challenging to govern Metaverse once there is a higher level of user dependence, thus they must act now, while Metaverse is still in its infancy, before the technology advances. Although disruptive technologies like VR, AR, blockchain, etc., have enormous potential in their applications, there is still doubt over how they will affect established legal systems. It goes without saying that regulating new technologies would be challenging and would call for a revision of current legal frameworks.