Legal World Of Metaverse

A new version of internet ‘Web 3.0’ has opened a flood gate for many applications like De-Fi, Blockchain, NFTs, AR Cloud. It has also paved the way for emergence of Metaverse.  

Web 1.0, Web 2.0 Web 3.0 

Web 1.0 is a pioneer form of internet under which a webpage was created and shared with its users to provide particular information. In other words, it was a read-only web. Web 2.0 is, on the other hand, not only limited to reading but it also provides its users to contribute. It is a two way communication system where users can also write their views. This type of internet works on all the devices be it desktop or laptop or mobile phone or tablet and is widely being used by social media companies like Facebook, WhatsApp, Twitter and many more. Web 2.0 requires its users to register themselves on websites and thereby Web 2.0 provider companies were able to build their own data base of collected information which ultimately gave birth to Web 3.0 which is decentralized, transparent and secure internet where users can interact with each other without the need for tech companies, banks, or any other middlemen and can claim ownership of virtual asset. Therefore, Web 3.0 provides it users not only to Read & Write but also power to execute or own an asset.  

Metaverse 

"Metaverse" was first imagined by Neal Stephenson in his science fiction novel ‘Snow Crash’ which was published in 1992. He imagined a virtual world with virtual land and objects and even a virtual life. Development of Web 3.0 has converted the imagination of Neal into reality as this is now possible to own a virtual asset (NFT) on Blockchain. In short, the Metaverse is a virtual world where users can live a second life. Almost everything is being digitized be it industrial facilities or buildings or vehicles or personal objects like wearable’s. Even humans are now digitising themselves by creating their own avatars in Metaverse.  

Facebook announced its new company Meta Platforms, Inc., Google rebranded as Alphabet, Microsoft recently announced a VR update for Teams. Apple Inc is going to release its first mixed or virtual reality headset, allowing people to interact virtually. Not only start-ups but the companies like Nike have already securing trademark for their digital products to protect their products in virtual worlds. Adidas has also launched its products on one of the Metaverse. Pioneer Metaverse are ‘Decentraland’ and the ‘Sandbox’. But a true Metaverse may still be a few years away. 

Legal world of Metaverse 

Data protection law, Competition law Copyright law, Securities and Banking law, Taxation law and Civil & Criminal law will be the area of law which will keep lawyers busy in Metaverse legal issues.  

The companies looking to use Metaverse platform to offer/advertise products or services will have to process user’s data such as facial expressions, gestures and other physiological reactions which is the only way out for advertising industry to know the possibility of success of their product on virtual platform. This in turn may invite legal complications on account of data privacy. The Metaverse will only be accepted by users if data privacy is assured to the users.  

The products on Metaverse shall be subject to intellectual property and copyrights laws and therefore may attract huge litigation. People have to take this into account from the very beginning of creation of IP to protect the same under these laws. This will avoid unwanted future complication.  Growing NFT world shall also require expert lawyers to deal with its legal issues.  

There are different laws on cryptocurrency in different countries. Some have supported crypto activity while others call for complete ban. It would be difficult to resolve legal issue in the absence of centralized regulating authority for the Metaverse. If false data is stored at very initial stage of a Blockchain and inadvertently accepted by other nodes, it will become difficult to fix accountability for the wrong. Global taxation shall be yet another law to be restructured. Money laundering through NFT will keep governments and lawyers engaged.  

However, large international law firms have geared up for Metaverse already, it is still a matter of debate whether the present legal system should be made flexible to deal with unique issue of Metaverse or a separate & specially designed legal system is needed. Governments of many countries are working closely with corporate companies and big law firms to make Metaverse more user’s friendly particularly for designers (sellers) & collector (purchasers).