The metaverse will be subject to stringent UK regulation, making tech giants behind the virtual worlds open to billions of pounds of potential fines, according to the experts whose work underpins the forthcoming Online Safety Bill.
The warning, which is supported by the British government, comes just days after Meta, the company formerly known as Facebook, flagged potential regulatory risks from its metaverse strategy to investors in a securities filing. Meta has already spent $10bn building its unprofitable augmented-reality division, seeking to create an avatar-filled virtual world.
“Technology companies can’t use the metaverse to escape regulation,” said Lorna Woods and William Perrin, the academics responsible for creating the model underpinning the Online Safety Bill. “The feeling is that Meta has moved the debate on to a new type of service that avoids regulation. But that isn’t the case at all in our view. The Online Safety regime applies.”
UK ministers, including Chris Philp and Nadine Dorries, have also previously warned that the new law would apply in the metaverse, whatever future form it took.
Meta said that safety and privacy will be baked into its metaverse designs and that it had already committed $50mn into research in this area.
Microsoft chief executive Satya Nadella has also painted his company’s $75bn purchase of video games company Activision as central to the future of online interaction as people spend more time in the metaverse.
Meta said in its annual 10-K report on Thursday that its metaverse efforts may be subject to new laws in the US and worldwide “including in the areas of privacy and ecommerce, which may delay or impede the development of our products and services, increase our operating costs, require significant management time and attention, or otherwise harm our business”.
Virtual worlds, where users’ lifelike 3D avatars can express themselves in a fuller range of human speech and gestures, present an even greater content-moderation challenge than the hundreds of millions of written posts and images that flow through Facebook, WhatsApp and Instagram every day.
Meta’s virtual reality boss, Andrew Bosworth, has admitted that virtual reality can often be a “toxic environment” especially for women and minorities. He said in an internal memo from March seen by the Financial Times that moderating user behaviour “at any meaningful scale is practically impossible”.
“The big caveat is we don’t know what the metaverse is, so it’s based on our best guess of what it might look like . . .[but] we need to think about what mitigations or solutions look like that are different in the metaverse, particularly in real time, compared to text or image-based static platforms,” said Woods, who is a professor of internet law at the University of Essex.
Further complicating the path to the metaverse are Meta’s hopes of incorporating blockchain-based digital payments, which it has warned investors will also involve a high degree of legal uncertainty and technical risk.