In the past 6 months the term ‘metaverse’ has catapulted from relative obscurity to the very top of the zeitgeist. Despite this recent spike in interest, work on ‘the metaverse’ has been underway for years. Its future will now be shaped by a wide range of industry players and potentially regulators and legislators.

What is the metaverse?

The term “metaverse” still has a somewhat contested definition. As a concept, the metaverse has been positioned as the next step-change for the internet, part of the broader shift between web 2.0 to web 3.0.

Practically, the metaverse has been described as a network of shared, three-dimensional interoperable virtual spaces accessed over the internet in real time by effectively an unlimited number of users. But virtual spaces have existed since the likes of There and Second Life, along with a wealth of other online role-playing games and virtual experiences released since. So, what differentiates these from the “metaverse” we hear about today?

• User immersion and interactivity are hallmarks of a fully-fledged metaverse. Experiencing virtual spaces through a desktop or mobile interface is one thing, but accessing them through immersive augmented reality (AR), virtual reality (VR) or mixed reality (MR) technology better embodies the metaverse of today.
• An expanding scope is key to how we need to be thinking about the metaverse. Virtual worlds have had a social, gaming, entertainment and educational use case for decades. While the metaverse will undoubtedly enhance experiences in these sectors, the  commercial world is now being brought into the virtual fold. The application of metaverse technology for the workplace is already live and is expected to be pivotal to mainstreaming the technology. We are increasingly seeing ecommerce, telehealth and real estate (among other sectors) enter the metaverse.
• Finally, what some commentators describe as the “full-fat” metaverse of tomorrow is poised to attract a level of mass-market uptake and social ubiquity. Metaverse-experiences available today are decidedly niche in terms of market penetration. But just as a majority of the global population now access the World Wide Web as part of normal life, some see a fully-realised metaverse attracting similar popularisation over time.

So, when you think metaverse, think of virtual online spaces that are accessed through increasingly immersive technology and experienced in a wide range of personal, social and commercial contexts. Although achieving a ubiquity akin to today’s internet will be many years off, these spaces are predicted to dramatically increase in global uptake.

A transitionary metaverse

Search engines are currently being battered by queries about when the metaverse will ‘launch’, ‘arrive’, or ‘be ready’. These questions, while understandable, somewhat misunderstand the current nature and breadth of the metaverse.

For starters, there isn’t a single, unified metaverse (and there may never be). Putting existing metaverse-style experiences to one side, metaverses under development are being built by many different players. But until such time that one metaverse, or a small handful of metaverses, becomes dominant, expect a diverse field.

Looking ahead – the regulatory minefield

While it is important to understand the present reality and limitations of a phrase like ‘metaverse’, it would also be short-sighted to disregard the concept as merely hype or a hollow buzzword. From Meta’s rebrand to Microsoft’s recent acquisition of Activision to Disney’s appointment of a Chief Metaverse Officer, there are clear signals that metaverse experiences are set to increase, improve and popularise over the coming months and years.

The social use-cases and commercial opportunities are wide-ranging, but as a metaverse future emerges, so too will the legal and regulatory challenges (some expected, and others more novel).  

• Early commentary has already flagged the potential for the metaverse to create new privacy and data protection challenges. In addition to the usual online privacy concerns, metaverse experiences may involve the collection of novel and previously unimagined personal datapoints, including how users physically move through virtual world, their gestures and expressions, and how they interact with other users.
• Online safety, an emerging regulatory concern worldwide, will almost certainly be relevant. Existing online harms, such as cyberbullying and exposure to illegal and harmful material, have the potential to be exacerbated by increasingly immersive environments. Indeed, the Australian online safety regulator, the eSafety Commissioner, has already issued community guidance around immersive online experiences such as those found in the metaverse.
• Given the immense commercial interest in the metaverse, consumer protection will also need to be kept front-of-mind. How information and advertising is delivered in these virtual worlds, and how businesses can be held accountable for the sale of virtual goods and services, will present new challenges to existing consumer laws.
• Existing metaverse-style experiences demonstrate the potential for thriving marketplaces, facilitating the flow of in-game, crypto and fiat currencies. Much like how financial regulation continues to adjust to the rise of cryptocurrency and new payment technologies, a metaverse culture will provoke similar regulatory responses.
• Finally, the commercialisation and protection of intellectual property will be a key concern of lawyers whose clients ‘enter the metaverse’. Relatedly, our colleagues in IP recently discussed the relationship between digital property and intellectual property in the metaverse.

Only time will tell whether existing legislative and regulatory regimes will appropriately respond to a growing metaverse uptake, or whether specific intervention from governments will be required in the future.

Authors: Lesley Sutton, Mark Ferguson and Bryce Craig