3 Key Legal Challenges That The Metaverse Could Face

3 Key Legal Challenges That The Metaverse Could Face

Metaverse News
September 12, 2022 by Diana Ambolis
The last two decades have been chiefly devoted to addressing laws and legal handling of the internet and related technologies. One of the most recent innovations that have started to confront regulators and policymakers is the metaverse, which will almost certainly continue to do so. Although the metaverse and its well-known cousin, the internet, have
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The last two decades have been chiefly devoted to addressing laws and legal handling of the internet and related technologies. One of the most recent innovations that have started to confront regulators and policymakers is the metaverse, which will almost certainly continue to do so. Although the metaverse and its well-known cousin, the internet, have many of the same legal difficulties, the metaverse is different because of how many technologies have come together.

Although there are many ways to interpret the term “metaverse,” it is generally accepted to refer to a digital simulation of the actual world that allows for social interactions similar to those in it. It’s significant because many industries, including entertainment, education, gaming, and medicine, are using technology.

While quantum computers may soon enter the mainstream, haptics is well on its way. Virtual reality (VR) and augmented reality (AR), as well as blockchain technology and parts of the Internet of Things, will be used by the metaverse in the majority of its manifestations (IoT). However, there are a lot of particular problems as well, given the enormous scope of technological convergence and the immersive experience that the Metaverse offers.

The Metaverse might soon encounter the following significant legal issues.

Controlling User Behavior

The first, in no particular order of importance, has to do with controlling user behavior. Since there have been so many sad instances of sexual harassment in the metaverse, it is essential that user behavior be regulated, whether through rules that apply to platforms or individuals.

This is particularly true given how the metaverse inspires users’ originality when creating their own spaces and engaging with other users. For instance, a person might design an outfit with pornographic imagery and jeer other users on the platform. They might come back and pursue you using different avatars. They might also pretend to be someone else to obtain private information.

There may be several instances of this, and given the immersive nature of the metaverse, innocent users may feel harassed and tormented. There may also be real-world repercussions from such actions. What, therefore, should be done to control such behavior?

The Indian Penal Code, 1860 (IPC), which is still very much in effect, often considers victims real people rather than computerized avatars. Therefore, even though the person controlling an avatar attacked in the metaverse may have been traumatized by the experience, the avatar may not be a victim under the IPC.

Additionally, the IPC anticipates a tangible impact, whether through physical touch or involvement of bodily organs, for several offenses like rape and unlawful use of force. This would not exist in a virtual environment. However, some crimes, such cheating by personation, are more generally defined and may be understood to encompass a person impersonating their avatar to pass for someone else. However, implementing these rules would still be difficult, mainly when dealing with transnational offenders.

Since users can create several profiles without being confirmed, blocking them might be useless. Platform policies may be helpful, but platforms will not be able to bring legal action against specific individuals, even if they are Indian citizens.

Therefore, it may be required to reassess the laws to prevent such conduct online, particularly regarding the liability of a natural person operating an avatar and the effects on the victim. However, even criminal laws will be ineffective against users based in another country.

The focus of the legislation may then shift to the function of intermediaries, a tactic used by many nations to regulate the internet.

Also Read: 4 Ways Society Is Affected And Developed By The Metaverse

Ownership of Intellectual Property and Other Rights

The metaverse’s creativity would presumably be constrained only by human imagination. Users will create more content due to a platform’s increased capacity for innovation and functionality. Therefore, it would be crucial to identify whether or not what a user produces on a platform constitutes IP and, if so, whose it is. Does the user possess a license to it if the medium is the owner? If so, to what extent is that permission granted? In their conditions of use, platforms must provide answers to these queries. This would also influence how accessible (in terms of open source) or economically viable (and profitable) any given metaverse platform is.

Laws against IP infringement would constrain users’ creativity. Would it be illegal, for example, if a user changed their avatar to look like Iron Man, infringing either Robert Downey Jr.’s personality rights or Marvel’s copyright in the franchise? In addition, who would they file a lawsuit against the user for violating the copyright or the platform for facilitating such a violation?

The platform’s content is the other component. If a metaverse has a reproduction of Connaught Circus or Times Square, the platform would probably need the authorization to copy both the business names and the iconic building facades.

How ownership of the hamburger or the automobile would be determined in the event of collaborations with other service providers, such as a Burger King location or a Ferrari dealership in the Metaverse, is another intriguing issue. The issue of ownership and rights becomes much more fascinating when paired with AI-created IP because it is not yet apparent whether AI can ever acquire any IP.

Then, of course, there is the question of enforcement. There is no lack of infringing content on the internet, and IP owners frequently choose not to take legal action against various parties since doing so would be expensive. Therefore, it is imperative that business stakeholders in the metaverse carefully consider the IP strategy they would like to implement and how to best combine creativity and commerce.


The issue of interoperability is both a technical and a legal one. The metaverse is not a single, cohesive virtual 3D environment where all platforms coexist. There will probably be huge players and smaller ones, similar to social media websites, and the participation of one’s peers on a given platform may drive one to do the same.

The same person could live very similar or dissimilar virtual lives across many platforms. On one forum, a user might be a sports club owner in a virtual Dubai while living on Mars as a teacher. Users will likely spend money on the platform to upgrade their virtual selves, homes, and skills. This could be done with real or virtual cash from the venue.

In any scenario, many users would invest a lot of time and energy into creating their metaverse lives and be possessive of it. What would happen if they ultimately decided to transfer this life to another platform or if the forum decided to close down?

On the one hand, from the standpoint of compulsory user retention, it would not be in the interest of a platform to make users’ life transportable onto another platform. However, media may be required to support smooth data transfers by protection and privacy regulations that include data portability obligations.

Additionally, a group of different service providers may work together to give users additional value by letting them switch between other platforms.

Naturally, this would require standardized hardware and software. It will also cause many issues, particularly concerning contracts and intellectual property. For example, how will IP licenses operate across platforms, and which platform’s conditions of use would take precedence when a user transitions? Could a competition law issue exist if a dominating platform refuses to make its contents interoperable?

These are only a handful of the fascinating legal restrictions and issues that will unavoidably surface as the metaverse spreads. Despite claims that the internet has an open design, numerous Metaverse platforms are being developed by corporations.

Because of this, platforms must and will need to consider various other criteria, including user experience, fairness principles, and even morality, even if financial concerns are likely to be given high priority. Platforms can demonstrate their ability to self-regulate by acting responsibly; if they don’t, the law can be utilized to push them on the correct path.