Tallinn University of Technology

Does the metaverse perplex data protectors and legal professionals? ‘This would not be the case if we applied the rule of law in the artificial world – everything prohibited in the real world should also be forbidden in the virtual realm,’ stated Tanel Kerikmäe, Head of the Department of Law of TalTech.

Tanel Kerikmäe metaversum
Professor Tanel Kerikmäe

The metaverse is a concept of a permanent 3D universe, combining several different virtual spaces. Although the vision of Mark Zuckerberg, the founder of Facebook, is far from being realised, elements of the metaverse already exist – there are several platforms which allow users to work, meet, and communicate in 3D rooms.

However, this raises question regarding rules and the legal protection of the huge amount of data which is going to flood the market. Citibank believes that the metaverse will be worth 13 trillion dollars by 2030, constituting almost a tenth of the current volume of world economy, according to a recent calculation of IMF.

As the Department of Law of TalTech cooperates closely with leading scientists working with new technologies, Kerikmäe was recently invited to be a guest lecturer by the highest-ranking research centre in Asia – the National University of Singapore. He was also the first foreigner to be accepted as a member of TRAIL (the Centre for Technology, Robotics, Artificial Intelligence and the Law) and is participating in the metaverse research group, financed by Meta, along with legal scholars of Singapore.

Legal regulation must be in place

On 20 September 2022, over two hundred business leaders, legal practitioners, researchers, and policy makers convened in Singapore to discuss and share their views on privacy and data protection, intellectual property, criminal liability, and legal choices in the metaverse.

At the conference, Kerikmäe spoke about the possibilities for regulating undefined technologies and the paradoxes of trying to set normative boundaries in virtual reality – topics which unfortunately receive too little attention. ‘The market establishing new norms through painful experiences should not be the main strategy. During the genesis of the metaverse, the need for regulation is clear because the new market requires a recognised payment system and the NFT technology does not fit its traditional framework,’ Kerikmäe gave an example, which he also used at the high-level conference in Singapore.

More than a playpen of a bored billionaire

‘The main issue lies in the developers of virtual reality favouring self-regulation while the states defend their citizens from data leaks and the consumers protect their rights as owners of data. Establishing international norms is impossible due to differing ideologies – look at the European Union versus China, for example,’ Kerikmäe added. Not to mention Russia. ‘If we presume that the metaverse is simply a playpen of a bored crypto-billionaire who buys Lacoste’s NFTs, then we are mistaken. Even warfare can be influenced in many ways through virtual means, such as Twitter, TikTok, Facebook, and other platforms, and we have seen Ukraine use them very efficiently. Unfortunately, we cannot fight the entire war online,’ Kerikmäe states. At the same time, there is a danger of rising monopolies if the services of the metaverse are concentrated into the hands of a few tech giants with resources.

In 2021, Meta allegedly invested 10 billion, and this year, their investment will exceed 80 billion dollars, although they publicly support the idea that the metaverse should not belong solely to technological mega-corporations. The market already exists, albeit partially – one of the telling examples being the deal allowing Curzio Research Inc. to acquire 19 commercial real estate objects in the TCG World environment, which owns 800 square kilometres of virtual space, for five million dollars. Despite many considering the concept of virtual real estate ridiculous, Kerikmäe believes that we need to consider that it is currently unclear which areas of life and services would be fully ‘spared’ from virtual environments, despite the consumers needing to eat in the real world. In five years, the new generation of consumers is predicted to spend five hours on average in the metaverse and the notion of cyber crime is also expected to expand considerably due to the growing market.

Estonia could lead the discussion

Kerikmäe states that the European Union is the best-prepared region to tackle problems caused by using virtual reality (including the volume of biometric data, which is going to multiply) because it is soon going to adopt new transnational acts regulating digital society, which will be binding on the business partners of EU companies even outside Europe.

The best solution, which presents so-called challenges to many traditional areas of law in the metaverse (privacy, sale of data, intellectual property, criminal law, etc.), is the standardisation of services and products as well as the prevention of cartels between large technological corporations and even closer monitoring of the legality of the activity of data controllers and processors.

Kerikmäe encourages the government of Estonia and its experts to assume the role of a leader, ‘Estonia as the flagship of digital society could be a leader in this discussion.’