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THE METAVERSE.

Updated: Aug 30

The Metaverse is a popular tech concept seeing that ‘Facebook’ is now ‘Meta’ and NFTs are the new fad, but what is it, is it here to stay and how will the legal system interact with this novel technology?


The idea of the Metaverse might seem far-fetched and futuristic but we see many technologies that are similar such as blockchain, NFTs, cryptocurrencies, and even VR and AR videogames such as Fortnite, which has quickly become a household name at least in the west. The Metaverse is essentially a network of virtual words connected by the internet allowing individuals to access multiple different spaces as one avatar. Much like the internet, the Metaverse allows individuals across the world to connect, share information and consume and produce content, however, the Metaverse aims to be a more immersive experience. Meta claims it can replace social interaction allowing humans to do all sorts of social activities from the comfort of their own homes.


So, we know that the Metaverse, or at least a crude version, is already present but will it become a widespread phenomenon? Judging by the way NFTs have taken over Twitter timelines and newspaper headlines it’s easy to say the Metaverse is the obvious next big thing but there are some hurdles.


Firstly, the technology that allows individuals to access the Metaverse is quite clunky and expensive, the technology is in its infancy, and many have reported experiencing motion sickness and physical pain after using these VR and AR headsets for too long[1]. This then means the Metaverse is not widely accessible and can’t be used as a replacement for social interaction as many companies would like it to be.


Secondly, since the Metaverse is, at its core, an extension of the internet, all the problems we have seen social media platforms causing, will extend into the Metaverse. For example, Facebook, just before its rebranding, faced widespread scrutiny[2] about its use, and their lackadaisical attitudes towards its use, to spread propaganda, cause violent upsurges like the January 6th[3] insurrection in the US, as well as its lack of attempts at making their platforms safer for kids despite knowing the harm it can and does cause[4].


Lastly, the use of VR and AR technologies is not seen as particularly “cool” or desirable amongst the younger generations of internet users but NFTs and Cryptocurrencies are very popular. It is also important to acknowledge that the computing resources and technology that would serve as the foundation for the Metaverse and NFTs[5] might be causing irreparable damage to the climate because of its largely unsustainable use of electricity[6]. By understanding these factors combined with the fact that creating a virtual economy will create huge amounts of, so far largely unregulated, capital[7] and profits for these large companies and ‘creators’, I think the Metaverse is largely unavoidable.


Even though the technology might not be sustainable, and the technology is far from perfect, the money speaks its own tune. The Metaverse then can just be seen as an extension of these technologies that have become so popular recently. Judging by the interest shown towards cryptocurrencies and NFTs, and the boom in these markets, it’s safe to assume the Metaverse can’t be written off but, there are many unknowns. The economic opportunities that the Metaverse presents are very real, and corporations have a vested interest in making the Metaverse a global phenomenon inventing new ways of profit-making by selling consumers virtual products for use in the Metaverse. Considering the economic possibilities as well as the growing demand for and appreciation for all things virtual, it is safe to assume the Metaverse is soon to blow up.

An important aspect of the Metaverse is that of crime and legality. According to the Centre for Countering Digital Hate (CCDH) the Metaverse has already seen crimes against women and children encountering inappropriate content[8]. The CCDH suggests that there is one incident of abuse and harassment every 7 minutes,[9] declaring the metaverse unsafe. In March of 2021, Andrew Bosworth soon to be Meta’s CTO, said “policing user behavior at any meaningful scale is practically impossible”.Clearly, the Metaverse is not a crime-free space, but can these crimes be stopped, and is the current legal system prepared to take on the legal issues that will spring up in the Metaverse?


The legal issues that could prop up can be summarised as falling under these four categories: ownership-related disputes, content-related disputes, user-Metaverse disputes, and inter-user disputes.


Disputes over ownership of the underlying intellectual property are going to be frequent and hotly litigated, as billions of dollars can ride on the outcome. There will be endless disputes over whether a particular metaverse patent is being infringed by other technology, particularly given how fast the technology is evolving since it will be difficult to tell a “novel” invention from a mere modification of an existing one. As with all other software disputes, there will be mountains of litigation over whether copyrighted software operating the metaverse has been infringed by other software.


A key fight that would be fought in the contract arena is, who owns metaverse rights under existing contracts that were drafted before the metaverse was even contemplated.


The next set of legal issues are claims relating to the content in the metaverse; What can and can’t be included in metaverse content? The Copyright Act protects the owner of an original work from third parties copying that work. If an individual user inserts unauthorized copyrighted material into the metaverse, who will be held liable? The user, the Metaverse company, or both? With NFTs gaining popularity it's intuitive to assume that trademarks such as those of designer brands, for example, might be used by creators in their NFTs, this will presumably bring on a slew of litigation.


There are going to be numerous claims by users against metaverse companies, particularly for personal injuries. The metaverse requires the use of a head-mounted device, so the user cannot see the actual environment they are in. The metaverse can be so real and scary that 30% of participants could not make it across a room with a simulated tightrope walk between the twin towers, so there may even be a few heart attacks. The metaverse can also cause significant nausea to the point of vomiting when the visuals do not align with body movement. Some people may become addicted to the metaverse, and some may be traumatized by events that occur in the metaverse. Without question, there are going to be suits for negligence and product liability against metaverse companies and the suppliers of any hardware, software, and content.


Even beyond physical injuries, there will be the standard boatload of class actions for violating privacy or data mining laws or for damages after the inevitable hacking of personal or credit card information. The privacy claims will be particularly acute since some metaverse companies will scan the user’s face and body dimensions, know what they like to look at with eye-tracking, and sell that information to advertisers. Claims by users against other users for various nefarious misdeeds done in the metaverse will also inevitably spring up. This is especially since every imaginable crime and tort that can be committed in the real world can be committed in the metaverse, particularly with multiple participants.


All this said a very real concern is that of jurisdiction. While we can contemplate the types of legal issues and crimes that might be brought to light in the Metaverse, it is difficult to say which jurisdiction these crimes will fall under. This is clearly an area that is unclear.


Concerns about privacy and jurisdiction are very real and so far, unresolved. In an era where collecting data points is profitable, the metaverse will seemingly only exacerbate the privacy infringements that many internet users are starting to become aware of. As a nation we have just come around to declaring the right to privacy a fundamental right, will the Metaverse make this ruling redundant? Questions such as these cannot yet be answered and so our current legal system seems too ill-equipped to take on the barrage of litigation that the Metaverse will open up. The Metaverse is also a large niche and unexplored space leaving little data to analyze and predict possible future occurrences or even to confidently maintain that the Metaverse will be a success, but it is clearly coming.


[1]https://www.wired.com/story/how-to-reduce-motion-sickness-virtual-reality/

[2]https://www.nbcnews.com/tech/tech-news/facebook-whistleblower-documents-detail-deep-look-facebook-rcna3580

[3]https://www.theguardian.com/technology/2021/oct/23/facebook-whistleblower-january-6-capitol-attack

[4]https://economictimes.indiatimes.com/magazines/panache/evidence-that-facebook-knew-kids-using-apps-were-at-risk-of-harm-can-dent-its-global-dominance-say-experts/articleshow/86829608.cms#:~:text=WASHINGTON%3A%20Facebook's%20previous%20major,at%20risk%20of%20being%20harmed.

[5]https://www.wired.com/story/nfts-hot-effect-earth-climate/

[6]https://www.nytimes.com/interactive/2021/09/03/climate/bitcoin-carbon-footprint-electricity.html#:~:text=But%20first%2C%20consider%20this%3A%20The,nation%20of%20about%205.5%20million.

[7]https://www.forbes.com/sites/cathyhackl/2021/03/15/making-money-in-the-metaverse/?sh=2c7e1bb3b432

[8]https://www.counterhate.com/post/new-research-shows-metaverse-is-not-safe-for-kids

[9]https://www.counterhate.com/metaverse



Navin Kumar Jaggi

Dhriti S. Somasundar

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