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EU metaverse strategy to look at privacy, competition and rights

ProDentim

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The European Commission’s metaverse strategy due next week is delayed and won’t really have any teeth – but there are real political concerns about how virtual worlds will deal with political issues such as property rights, technology standards and confidentiality.

First announced by Commission President Ursula von der Leyen in an annual speech in September, a policy paper on virtual worlds has been postponed for as long as it could. European commissioners are expected to approve it next Tuesday; later and they would clash with preparations for the next edition of the State of the EU Address.

The committee has previously suggested the proposal will not be legislative, discussing policy issues rather than putting forward a formal bill – but it could pave the way for stronger action in the future.

The metaverse strategy is “the start of something, it sets the agenda,” said Patrick Grady, editor of the Brussels website and research initiative Metaverse EU. “Once the machine is in motion, it doesn’t really stop.”

Grady, who also leads the technology practice at consultancy Fourtold, points to the commission’s 2018 strategy on artificial intelligence – which, although it did little more than promise a stakeholder alliance and reinterpret the rules of accountability, proved the omen of more to come, and an AI bill followed in 2021.

This involves risks but also opportunities. A clear regulatory framework is often welcomed by industry, but EU rules in areas such as AI have proven controversial. The example of the recent Block Data Act – theoretically concerned with government information collected by connected objects like cars or refrigerators, but which some Web3 proponents fear could effectively make smart contracts illegal – shows that there is always a risk of unintended consequences.

The commission said the metaverse will need to incorporate “European values” – with officials specifying topics such as discrimination, security and data control. A blog by Commissioner Thierry Breton and a subsequent Commission consultation hinted at a more immediate EU fear – that Web3, like its predecessor, could be dominated by big players crushing the competition.

This may include familiar faces. Facebook has rebranded itself as Meta (META) as it pivots to a more immersive experience, and Apple’s (AAPL) move into the space could prove transformative.

At a hearing in April, Aleksandra Kozik, Meta’s public policy director for the EU, was questioned by lawmakers interested in topics ranging from the impact of technology on jobs, to discrimination and abuse. of organized crime.

“The Metaverse is not a single product that will be built by a single company,” Kozik told members of the European Parliament’s Legal Affairs Committee. “It’s a constellation of platforms, technologies and products that will be built by many different stakeholders, by companies large and small.”

The commission may be skeptical of such analogies, given that it has often blamed Meta for trying to be the brightest, if not the only, star in its firmament. The grammar could offer a clue as to the true thinking of the EU executive, Grady points out.

As with the internet, the whole point of the metaverse is that it’s a single, unfragmented space — “siloed metaverses are almost the situation the EU is trying to avoid,” Grady said.

Yet the commission’s own article is about virtual worlds, in the plural – suggesting that Meta might be one of many separate walled gardens – while Breton talks about both the metaverse and different metaverses.

One solution is to ensure that developers like Meta work within common international standards. But, as Grady points out, the EU’s own antitrust rules can sometimes get in the way, since any grouping of supposed competitors is likely to be treated as a cartel.

Some in the digital sector see opportunity in anything the commission might announce.

“Virtual worlds are increasingly part of a modern digital industry and this is where Europe excels, so we would like to see a strategy that aims to support this,” a spokesperson for the lobby group said. DigitalEurope to CoinDesk in an emailed statement, citing possibilities. such as cheaper online job training, virtual factories and power grids.

But there are many more legal dilemmas raised by the Metaverse – including fundamental rights.

“Personal property interests in virtual worlds are radically undermined” by the fine print of online terms and conditions, Joshua Fairfield, a law professor at Washington and Lee University, told lawmakers in April. “The Metaverse End User License Agreement defeats the United States Constitution because it operates under this concept of consent to override many social rules that we take for granted.”

How to deal with these core issues remains hotly debated – and, in particular, whether the Metaverse is really so new that it needs its own rulebook.

“The Metaverse is not being built in a regulatory vacuum,” Meta said in its response to the EU consultation, citing existing online laws that continue to apply. “As new or unique issues arise over time as the metaverse continues to evolve, we call on the Commission to address any emerging legislative gaps on a case-by-case basis, using evidence-based policymaking. evidence.”

For others, virtual worlds represent a sea change, given how heavily they rely on potentially invasive technologies such as headsets and goggles.

Extended reality technology “poses substantial human rights risks” and “could continue the march toward increasingly pervasive collection of sensitive data and ubiquitous surveillance” by governments and corporations, even going into people’s thoughts and emotions, said a consultation response by online rights activists from the Electronic Frontier Foundation.

Does any of this matter to your average crypto fan? That will probably be enough if the predictions of the commission’s joint research center come true.

“Blockchain and cryptocurrencies are likely to be the technological building blocks of a decentralized infrastructure” that underpins the metaverse, according to a JRC report released on Monday.

It will be music to the ears of those who believe that online virtual worlds require a radically different way of thinking than the centralized structures that have come to dominate Web2. This also means that the regulation of the metaverse carries a risk for the crypto sphere.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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