In the ever-evolving landscape of the digital world, the European Union (EU) is gearing up to release its metaverse strategy, which aims to address critical issues surrounding virtual environments. Although the upcoming policy paper, set to be unveiled next week, will not have the power to enact legislative rules, it signifies the EU’s commitment to exploring the complexities of the metaverse. This article delves into the potential implications of the EU metaverse strategy, emphasizing privacy, competition, and individual rights.

Delayed Implementation

Initially announced by Commission President Ursula von der Leyen during her annual address in September, the policy paper focusing on virtual worlds has experienced delays but is expected to be approved by EU commissioners next Tuesday. The timing of its release is crucial, as it avoids conflicting with preparations for the next edition of the State of the EU speech. While the forthcoming proposal is unlikely to introduce legislative measures, it serves as a starting point for future actions and paves the way for further developments.

Setting the Agenda

The metaverse strategy, despite lacking immediate legislative impact, acts as a catalyst for change. According to Patrick Grady, the editor of Metaverse EU, a Brussels-based research initiative, the strategy will set the agenda and initiate a forward trajectory. Grady draws parallels with the EU’s 2018 Artificial Intelligence strategy, which initially focused on establishing stakeholder alliances and refining liability regulations. Eventually, this preliminary step led to the introduction of an AI bill in 2021.

Balancing Risks and Opportunities

The introduction of a clear regulatory framework within the industry is often greeted with appreciation. However, it is essential to navigate potential risks and unintended consequences associated with such rules. The EU’s recent Data Act, intended to govern data collected by connected devices, stirred controversy within the Web3 community. Concerns were raised that the legislation could inadvertently render smart contracts illegal, underscoring the need for cautious and thoughtful decision-making.

Embedding European Values

The European Commission emphasizes the importance of upholding “European values” within the metaverse. Key areas of focus include addressing discrimination, ensuring safety, and implementing robust data controls. Commissioner Thierry Breton’s blog and subsequent consultations underscore the EU’s immediate concern: preventing dominant players from stifling competition in the Web3 landscape. With tech giants such as Meta (formerly known as Facebook) and Apple entering the metaverse realm, the EU aims to strike a balance between innovation and fair competition.

Collaboration and Standardization

During an April hearing, Meta’s EU Public Policy Director Aleksandra Kozik shed light on the collaborative nature of the metaverse. Contrary to popular belief, the metaverse is not a single product developed by a sole entity; rather, it comprises various platforms, technologies, and products created by a multitude of stakeholders, both large and small. To foster interoperability and cooperation, international standards must be established. However, the EU’s antitrust rules present a potential hurdle, as collaborations among supposed competitors may be perceived as cartel-like behavior.

Addressing Fundamental Rights

The metaverse raises profound questions about individual rights, particularly regarding personal property interests. Joshua Fairfield, a law professor at Washington and Lee University, highlighted the erosion of personal property rights within virtual worlds due to the fine print found in online terms and conditions. The end-user license agreements in the metaverse often supersede constitutional rights, operating under the concept of consent and reshaping social norms. Resolving these fundamental challenges prompts intense debates over the necessity of a dedicated rulebook