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Regulating Big Tech and the metaverse: What the experts think

The biggest risk to Meta's metaverse plans is regulators with Zuckerberg's company in their crosshairs. We ask experts how new regulations might look.

Pádraig Belton

February 14, 2022

7 Min Read
Regulating Big Tech and the metaverse: What the experts think

With the metaverse "here already," the EU will need to think hard about "what will be the role for a regulator," says Margrethe Vestager.

That she is talking like this should give particular pause to Meta.

For one, Margrethe Vestager is the kind of person who is generally worth listening to. She's the EU competition commissioner, the European Commission's executive vice-president, and for extra credit, also chairs the Commissioners' group on a Europe Fit for the Digital Age.

But it gets worse. Vestager has been looking closely at Meta, and has spoken of Europe's need to take corrective action so smaller businesses can access the market, and potentially even break up the company as a "very last resort."

Figure 1: The metaverse means there are new areas of concern around 'privacy, security, safety, and shared experiences,' said Tuong Nguyen, senior principal analyst at Gartner.

 (Source: ZUMA Press Inc/Alamy Stock Photo)
The metaverse means there are new areas of concern around "privacy, security, safety, and shared experiences," said Tuong Nguyen, senior principal analyst at Gartner.
(Source: ZUMA Press Inc/Alamy Stock Photo)

If you thought the UK represented a convenient Brexit-y exception to this, then think again.

The UK's upcoming Online Safety Bill will apply in the metaverse, ministers have underlined.

"The Act will be there, and they will be accountable to the Act," said Culture Secretary Nadine Dorries in a parliamentary committee hearing in November 2021.

"I think my advice to people like Mark Zuckerberg, Nick Clegg and others who want to take off into the metaverse would be to stay in the real world, where the coming regime may add criminal liability on individuals to existing fines of 10% of global turnover," Dorries added.

Nor is the US a happy haven for Zuckerberg's more meta plans.

The Federal Trade Commission, along with a group of states including New York, launched an investigation in January looking into whether Meta is abusing its market dominance in virtual reality to suppress competition, Bloomberg reports.


Still, Mark Zuckerberg's company isn't taking the metaverse by halves.

As well as changing its name, it spent over $10 billion in 2021 (more than five times what it cost to buy Oculus in 2014) on virtual reality goggles, smart glasses, and other not-yet-released products in its Reality Labs division.

All these technologies aim to build on Meta's first stab at a virtual-reality social platform, the Horizon Worlds it released in December 2021.

Meta's spendthrift ways, though, meant that while revenues rose 20% in the last quarter of 2021, to $33.7 billion, profits fell 8% to $10.3 billion compared to the previous year and missed analyst expectations.

New ad spending in the metaverse is a long way off, though. Apple's privacy changes, which will make it harder for apps to track the digital habits of iPhone users, are about to carve a $10 billion a year hole in revenues.

But an even bigger fly in the ointment is that the new regulation that appears to be coming for all of Big Tech will also come for the metaverse, whether in Brussels, London or Washington.

New laws and regulations, in fact, "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," Zuckerberg's company said last week in a 10-K filing with the US Securities and Exchange Commission.

Meta has warned investors, too, that its hopes to incorporate blockchain-based digital payments will involve a great deal of legal uncertainty.

For a better look at the how, who and why of this coming regulatory onslaught, Light Reading asked a panel of experts whether existing Internet regulation might be enough.

Or if there are new problems governments need to address - how will they do this?

Playing the heavy meta

The whole point of the metaverse is that it will enable "new interactions, experiences and business models that aren't possible with the Internet today," Tuong Nguyen, senior principal analyst at Gartner, explains to Light Reading.

But this means brand new areas of concern around "privacy, security, safety, and shared experiences," he says.

Meta is exploring using eye tracking to monetize which advertisements your eyes linger over a little longer, and selling that information to companies. Lucrative, definitely; just a touch creepy, possibly.

"I think the problems possibly are going to be the same, but more extreme," says Lorna Woods, professor of Internet law at the University of Essex.

One example is haptic technology, designed to create an experience of touch by applying force, vibration or motion to a user. This technology is important for making a Holodeck-style world, with virtual objects you can touch.

But it is likely to make online assaults, which are currently formulated through text or perhaps audio, "more real," says Woods.

This isn't a theoretical problem. London-based psychotherapist and metaverse researcher Nina Jane Patel wrote chillingly in December 2021 about her experience of being verbally and sexually harassed in Horizon Worlds.

And while problems like assault can get much worse in the metaverse, traditional online remedies don't work there.

A lot of the "solutions to online problems that we talk about, like taking content down, or fact checking, or controls on virality, relate to a saved item of content whether it be text, a picture, or video," Woods says.

"I'm not sure how they translate to an environment which seems less formal, perhaps more operating in real time rather than the archive model we've got at the moment," she says.

In early February, after Patel's experience, Facebook said it would roll out a Personal Boundary, which defaults to a (perceived) four feet. Other avatars can't come closer than that to yours.

"Should've added a personal boundary to our data", said one developer on Twitter.

From the podcast archives: The Consumer Technology Association's Sayon Deb discusses the metaverse, the evolution of consumer electronics and where service provider networks fit in. (January 5, 2022)

I left the Metaverse just to be here

Existing laws that regulate the Internet will also apply to the metaverse, obviously.

But just how they will apply – for instance, laws requiring businesses to be accessible for people with disabilities – is sometimes an open question.

It's "encouraging that policymakers are interested in the metaverse, but I'd caution them from trying to regulate something that they cannot yet even define," says Daniel Castro, vice president at the Washington, DC-based Information Technology and Innovation Foundation, in an interview.

"My point isn't that the metaverse is a Wild West that needs more regulation, but that some regulations designed for today's Internet might not be fit for purpose for tomorrow's metaverse," cautions Castro.

There is, meanwhile, one massive difference between the start of the Internet and the 'birth' of the metaverse - which is, after all, a new name for something that has been around for a while. The likes of virtual worlds platform Second Life launched in 2003.

The Internet was designed to be open and interoperable, without one owner, says Stefano Maffulli, executive director of the Open Source Initiative in San Francisco.

And that open space "gave us the open web where Wikimedia exists next to the New York Times, eBay, and Amazon," he says.

So if the metaverse just ends up being "a Facebook with VR goggles," then, or even if it's a world of two or three tech companies like Microsoft and Snap, we'll be stuck in "a silo designed to make humanity dependent on a single provider."

Tech regulators in the EU, US and UK are already dubious about the wisdom of giving outsized market power to a small handful of Big Tech companies.

So they are unlikely to be reassured, you have to admit, by the very Meta-centric vision of Mark Zuckerberg's metaverse.

Related posts:

Pádraig Belton, contributing editor special to Light Reading

About the Author(s)

Pádraig Belton

Contributor, Light Reading

Contributor, Light Reading

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