The legal problems of the metaverse – Watch & Tribune > Retail

The first of these challenges is undoubtedly that of the possible reduction of competition. Tomorrow, one or two metaverse platforms (Microsoft, Meta…) can dictate their terms to the market. In order to sell on these platforms, it would necessarily be necessary to accept their unbalanced contractual terms (delisting, explosion of royalties, mandatory use of an encrypted currency stored with a subsidiary, etc.). The risk, therefore, is that a handful of platforms lay down the law on trading in this new universe. Sanctions for abuse of dominant position, significant unbalanced clauses already exist. The future DSA is expected to strengthen their effectiveness across Europe.

The second issue is the protection of personal data: by buying on virtual reality platforms, individuals will be prompted to pass more personal data of a new type to sellers. Detecting facial expressions, creating avatars that reproduce human features as faithfully as possible, are examples of what the shopping experience in virtual malls could be in the future.

However, biometric data is considered sensitive data that needs to be better protected.

In particular, the CNIL believes that the consumer should be given enhanced information about the device and should be able to refuse it without any consequences for him: he should therefore be able to continue with his purchase. Not sure if the metaverse lends itself easily to this.

More generally, the European regulation on the protection of personal data (GDPR) will have to be respected in a much more complex context than today. Determining who is responsible for the processing can therefore pose a problem: is it the online merchant or the metaverse platform? Do they both have this role, and if so, are they jointly and severally committed? These questions are of crucial concrete importance with regard to the responsibility and obligations towards the users, in particular the obligation to inform about the purposes of the collection and re-use of the data. Their transfer outside the European Union is also not done with asking thorny questions.

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Another subject for reflection: the user-consumer is of course an essential player in the metaverse, when, for example, he interacts with another user via his avatar. Can this avatar, an extension of his person, have rights and does he take his own responsibility?

Today the answer is quite simple, as the law only recognizes legal entities and natural persons. Every behavior must therefore be attributed to one or the other. An avatar cannot buy and pay online: the consumer remains a human being.

The fourth issue is not the least. It is that of the protection of intellectual property rights: copyright of course, but also design and design law and trademark law. Sellers who offer their products in a virtual shopping center must ensure that they obtain all necessary rights to the goods reproduced in this new universe. Assignment contracts with stylist teams should therefore be reviewed and adjusted if necessary.

Likewise, the wording of the brands definitely needs to be increased so that marketing can take place in the metaverse without legal hassles for the seller. For example, registering a shoe brand in class 25 is not sufficient. The metaverse is not an ecommerce site like the others, but a new virtual space.

Also keep in mind that: developing, exploiting or reselling NFTs (non-fungible tokens) inspired by or derived from pre-existing intellectual creations without the permission of the rights holder is likely to be categorized as counterfeiting. The immaterial nature of the transaction does not change at this point.

Also read: The importance of a Social and Economic Committee website

So the rules of law are there to regulate this new commercial space where avatars communicate and behave like people. So I’m not sure whether a new law or a new European regulation is needed. But again, technological developments force us to rethink the use of available legal tools.

Anne Neef

Attorney at Herald specializing in digital law, advice and litigation. She regularly advises e-commerce players on sector issues.

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