The meteoric rise of the metaverse: how can government and industry regulate it?
Posted 22 Jun 2022
The meteoric rise of the metaverse: how can government and industry regulate it?
In 2022, it’s almost impossible to avoid the term “metaverse” in conversations, the news, on social media or at work. This meteoric rise is reminiscent of the early days of the internet, or the peaks and troughs of interest in virtual reality both in the 90’s and 2010’s.
As a neutral organisation working with dozens of leading startups and corporations to accelerate immersive solutions – as well spearheading conversations around ethical and human-centred approaches to technology development – Digital Catapult is particularly interested in the implications of the metaverse, and in building a cross-industry consensus on what it means for the future of technology.
What do we mean by ‘the metaverse’?
The metaverse is not a new concept. The term itself is derived from science fiction, but the experiences that it aspires to, namely to enable spatial, embodied and immersive experiences through digital technology, have been central foundations of online worlds for years – from Second Life nearly twenty years ago to today’s popular gameworlds like Minecraft and Roblox.
Multiple technology areas come together to form the metaverse, including 5G, artificial intelligence (AI), the internet of things, distributed systems including blockchain, immersive technologies like virtual and augmented reality and potentially quantum, enabling virtual replicas of the physical world (such as digital twins) and a new cyber physical internet where information and experiences augment real life. For Digital Catapult, the metaverse will bring together these existing, fragmented technologies, into a single technological cluster, to fully unlock their potential.
With everyone paying attention to this enticing, but somewhat obscure, technological frontier, companies around the world are exploring how they adapt their products and services to create spatial and embodied experiences, where users can explore websites like new worlds, create avatars and replicate real-world experiences through the internet. This experiential turn is the premise of the rise of the metaverse, and it is getting attention and investment.
In 2021 Facebook announced it was rebranding to ‘Meta’, arguing that the company’s primary focus would be on developing the metaverse, the “embodied internet” where individuals can video call friends, shop and play games all in one virtual place. The metaverse extends well beyond the ambitions of Meta alone; there has been a sharp rise in industry announcements about investment in the metaverse and the implications for individuals and businesses alike.
With this radical pace in technological innovation come significant policy and regulatory challenges. Whilst new devices, standards, applications and services are emerging quickly, the potential impact on existing market structures and dynamics, privacy, competition, and consumer data, remain unclear.
The Metaverse Symposium
In May, Digital Catapult co-hosted the ‘Metaverse Symposium’ in partnership with the Digital Regulation Cooperation Forum (DRCF). This event brought together key senior stakeholders – from government (including DCMS, BEIS), regulators, academia and industry (including Meta, NVIDIA and leading startups) – to exchange ideas and perspectives on the potential implications of the metaverse and associated immersive technologies for people, businesses and the wider economy.
The DRCF is a collective of the UK’s four central regulators with a digital remit: the Competition and Markets Authority (CMA), the Financial Conduct Authority (FCA), the Information Commissioner’s Office (ICO) and Ofcom.
This was the first event organised as part of the DRCF’s technology horizon scanning programme, a series of initiatives organised to further engage with the small and medium-sized enterprises (SMEs), startups, academics, analysts, entrepreneurs, engineers, investors and innovators that are creating the technologies, products and services that will shape the future of UK digital services.
Regulating the metaverse: can it work for everyone?
The discussions focused on a number of cross-cutting themes. Of particular significance were the central business models of the metaverse and the role of interoperability. Interoperability, broadly speaking, refers to the ability to easily exchange information and data between different technological systems – for example, being able to create an avatar or personal profile that you could use for both an online shopping experience and on a video call with friends.
To get to this point, and to ensure the foundational components of the metaverse can interoperate, it was proposed that the many existing “walled digital gardens” would have to be broken down, with a drive towards open source models and the development of collaborative standards that benefit everyone involved.
Ethics, safety and privacy are also fundamental issues that need to be addressed at this pivotal point of interest in the metaverse. The audience and speakers discussed proposals such as embedded duties of care and ‘safety by design’ for metaverse technologies. Drawing on the Government’s Online Safety Bill draft and standards set for existing platforms, the extent to which the draft legislation and other standards might need to be extended and modified to cater for new and emerging technologies was discussed, especially where those experiences are more immersive and embodied.
There were also conversations around the need for clarity on where existing regulations applies, and the need for any gaps in prospective regulation and bodies of law to be identified and addressed – with a focus on areas like user behaviour and children’s use of immersive technologies like VR and AR. But central to all of these issues is the need for open communication between different sectors which support commercial innovation in a competitive and collaborative ecosystem.
Next steps
The benefits and risks of new advanced technologies to UK society need to continue to be emphasised, whilst mitigating any potential harms and ensuring that key voices are heard.
The Metaverse Symposium highlighted a shared commitment to continued communication and collaboration, ensuring that key skills, literacies and understanding are shared to best benefit the whole of society and enable it to work for all. This event marked an important step in the creation of a collaborative environment where key emerging issues could be directly discussed, ensuring that regulation is timely and not allowing problems to entrench.
You can read more about the event on the blog written by DRCF Strategy and Insights Manager, Jane Howe.
Digital Catapult continues to bring together digital ecosystems to drive the development of advanced technology solutions, in order to generate valuable commercial and societal benefits. As technology regulation further mobilises, Digital Catapult will continue to work with government bodies and regulators to provide knowledge and insight into our technology areas, working with both large and small companies alike to ensure their views are heard. The ‘Cyber Physical Future Forum’, organised by Digital Catapult during London Tech Week in response to the Government’s recent consultation, continued these discussions, considering the metaverse in the context of digital twins and other robotic and autonomous systems.
Key areas discussed in the event:
Business models
Open and closed models – and the importance of open source and interoperability. Breaking down walled gardens. Sharing patents
Building standards collaboratively and internationally. The UK could lead the way
The co-emergence of multiple ‘verses’ to build the ‘metaverse’
Building tools that are easy to use and keep the user at the centre
Making tools and data open, accessible and even free to developers to open up the markets
Protecting consumer rights – e.g. what am I getting when I buy a virtual asset?
Ethics, safety and privacy
Getting the balance of privacy and intellectual property without stifling growth
Allowing people to control their data and enabling choice
Review of existing data privacy and protection laws
Duty of care for platforms
Safety by design
Children’s use of immersive tech
Physical injuries, harassment and abuse
Gaps in existing bodies of law
Focus on behaviour as well as content
Competition
Creating new dialogues between different sectors – forging an “ecosystem of interconnectedness”
Supporting commercial innovation, empowering start-ups
Monitoring antitrust behaviours
Skills and funding
More funding available to enhance ecosystem and get more people learning key skills to build the metaverse
A shared language and media literacy that everyone can understand
Educating younger generation of users
Continued and further engagement with users
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