Members' Research Service By / July 5, 2022

The metaverse: opportunities, risks and policy implications

The European Parliamentary Research Service (EPRS) organised an online roundtable on 28 June 2022 on one of the most-discussed technology concepts of today: the metaverse.

Written by Michael Adam, Isabel Moran Vidal and Louise van de Pol.

The European Parliamentary Research Service (EPRS) organised an online roundtable on 28 June 2022 on one of the most-discussed technology concepts of today: the metaverse. Describing the metaverse as an immersive and constant virtual three-dimensional world, where people interact by means of an avatar to carry out a wide range of activities Anthony Teasdale, Director-General of EPRS introduced the event. He welcomed the panel of speakers and presented the briefing ‘Metaverse: Opportunities, risks and policy implications’, prepared by the Digital Policies Unit of the Members’ Research Service at EPRS. The roundtable discussion, moderated by Michael Adam, Head of the Digital Policies Unit, assessed the opportunities and risks deriving from the evolution of the metaverse and its potential impact on policy-making.

Axel Voss (EPP, Germany), Member of the EP Committee on Legal Affairs and previously Rapporteur on the report of the Special Committee on Artificial Intelligence in a Digital Age and on the own-initiative report on a civil liability regime for artificial intelligence, opened the event and set the scene. He recalled that the metaverse is the next big disruptive step in the digital world. It has the economic potential of turnover in trillions of euros. He stressed the legal uncertainties regarding data protection, intellectual property, cybercrime, e-identity and consumer and children protection. To prevent an evolution similar to the creation of social media, where regulations were drafted after tech companies had already fully developed social media platforms, it is necessary to start thinking now about regulation to secure European values in the metaverse.

During her keynote speech, European Parliament Vice-President with responsibility for STOA and Informatics and Telecommunication, Eva Kaili (S&D, Greece), applauded the EPRS initiative to discuss the metaverse at this early stage. She encouraged policy-makers to harness all the benefits of the metaverse and grasp the opportunity to deal with this technological change in the EU from the beginning. She pointed to a number of areas in which the European Parliament is already working on metaverse-related aspects. Technology always brings opportunities and challenges, but there is also always an option to decide how to use technology in the right way.

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The ensuing panel discussion began with an introduction from Frank Steinicke, Professor for Human-Computer Interaction at Universität Hamburg. Professor Steinicke described the technological aspects of the metaverse. Noting that the building blocks needed to create the metaverse are: realistic avatars; mixed reality technologies; 5G; artificial intelligence machine learning; and blockchain. He added that the computer rendering would improve in such a way that real and virtual worlds will no longer be distinguishable. Professor Steinicke is in favour of building a ‘Euroverse’ – a European metaverse. Acknowledging that the General Data Protection Regulation (GDPR), and forthcoming digital markets and digital services acts are good frameworks for the metaverse, the challenge lies in the enforcement of those regulations. He stressed the need to build a partnership with non-EU metaverse companies, to make Europe attractive for IT experts, and to invest in computation education.

Rehana Schwinninger-Ladak, Head of Interactive Technologies, Digital for Culture and Education Unit, Directorate-General for Communications Networks, Content and Technology (CNECT) at the European Commission, then took the floor to present the European Commission position. The Commission is moving forward by investing in research and innovation activities in extended reality – a core technological building block of the metaverse – through the Horizon Europe programme, as well as by funding content creation through the Creative Europe programme (with a specific action on videogames and immersive storytelling). The aim is to build a consolidated European ecosystem by bringing together technology developers, producers, integrators, and user industries. To facilitate dialogue between all these actors and policy-makers and identify key challenges, the Commission has recently implemented the XR4ALL community and the VR/AR Industrial Coalition.

Yuval Rooz, Co-Founder and CEO of Digital Asset and creator of Daml provided a view from the private sector of the opportunities and challenges of the metaverse. In comparison to the internet, governing the metaverse is not a bigger challenge. He recommends regulators consider whether existing regulations are sufficient and create tools that would be able to efficiently enforce those regulations in the metaverse, potentially with the help of companies and innovators. Two key components of the metaverse are identity and financial interoperability. One way of protecting identity in the metaverse is the creation of a wallet of identities, where, for different activities, different levels of identity authentication would be required.  

In her presentation, Verity McIntosh, Senior Lecturer and expert in virtual reality at the University of West of England shared some of the results from the report she co-authored, ‘Safeguarding the metaverse’, with the audience. Existing harms associated with the proto-metaverse spaces include unsupervised use of virtual space, ineffective age limitation validation, exposure to age-inappropriate or illegal content and behaviours, failure to differentiate between virtual and real-world reality, harassment and abuse. Because the metaverse transcends geographical boundaries, the question of who will monitor the safety of its users is not straightforward. Other risks examined during research that need to be addressed were: who owns the behavioural data generated; neurological rights; digital poverty and inclusion; and impacts on the future of work. She recommended that policy-makers invest in inclusive infrastructure and skills, in immersive literacy, to provide appropriate legislation and designate competent institutions to empower consumers in connection with metaverse companies.

To watch this event online, please click here.

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