Metaverse: where virtual freedom meets real jurisdiction

The metaverse could transform the business world in the near future. Whether this succeeds depends not least on the legal framework and legal hurdles that need to be overcome on the way to the goal. Companies are faced with the challenge of applying existing legislation and laws to this new environment.

In its study "Regulating the Metaverse", the Fraunhofer Institute for Industrial Engineering (IAO) presents the legal hurdles and challenges that companies must overcome when integrating the metaverse into the business world. The study shows that the secure application of existing laws and the clarification of jurisdictional issues are key success factors.

The Fraunhofer IAO study aims to provide companies with a solid basis for overcoming these legal challenges of the metaverse. It is intended to offer recommendations to overcome legal uncertainties and encourage companies to actively exploit the opportunities of the metaverse. Günter Wenzel, Head of Extended Environments at Fraunhofer IAO, emphasizes to Informationsdienst Wissenschaft (IDW): "The metaverse is an exciting terrain that offers companies numerous opportunities. It is crucial to use the existing legal possibilities to offer new products and services."

Support for companies through concrete assistance

The study recommends the creation of "regulatory sandboxes" to enable companies to test metaverse applications in a secure environment and develop new solutions. According to the authors, cooperation between companies that are active in the metaverse or want to become active in the metaverse is crucial for the development of effective strategies.

The study offers concrete recommendations for action on key topics in order to make effective use of the opportunities offered by the metaverse. The points cover the following areas:

• Creating legal certainty: Policymakers should adapt existing laws to the realities of the metaverse. This includes the reorganization of formal requirements in contract law, the development of quality criteria for virtual goods and solutions for dealing with anonymity.
• Raising awareness and training, IT security: Politics, educational institutions and research must launch information campaigns on IT security and offer training in dealing with cyber attacks in order to raise awareness of cybercrime.
• Involve experts: For suitable regulatory solutions without over-regulation, expertise from industry associations and scientific institutes should be incorporated into legislation.
• Clarify legal issues: The study emphasizes that with regard to the classification of economically relevant actions in the metaverse as well as the sale of virtual goods, many open legal questions still need to be clarified.

The authors of the study are calling on companies to do so. They should actively participate in shaping the metaverse in order to jointly develop solutions and successfully shape the digital future. The IAO sees a clear regulatory framework as a decisive factor for the success of the metaverse.

In this context, the Fraunhofer IAO is currently launching an innovation network with various players from the digital value chain in order to gain initial experience with Extended Reality XR and the metaverse in a protected environment in exchange with other companies. The institute offers a modular system of hardware and software solutions to take companies to the next level of Internet evaluation. Companies interested in implementing regulatory sandboxes can contact the Fraunhofer IAO directly.

The regulatory sandbox is designed to enable companies to test and develop new products, services or digital business models in an environment monitored by regulatory authorities.

(nen)