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.

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.

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.

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.