METAVERSE – The Journey Has Begun

METAVERSE – The Journey Has Begun
Businesses have the metaverse on their agenda, as both our clients’ enquiries and the latest legislative activities show. The transformation to “Web 4.0” has begun and the European Commission currently sets about regulating it.
There is no time to wait with the strategic analysis of the new opportunities and risks, though. In order to support you, we prepare a series of short blog posts, starting with the following assessment of the current status and our suggestion for your legal focus:
1. The metaverse already develops around us:
With a growing interconnection of physical and digital worlds based on developing and new technologies, a new virtual and immersive environment develops blending theses worlds, in which business processes are being integrated.
The metaverse is, according to the Commission, based on “advanced artificial and ambient intelligence, the internet of things, trusted blockchain transactions, virtual worlds and XR capabilities, digital and real objects and environments are fully integrated and communicate with each other, enabling truly intuitive, immersive experiences, seamlessly blending the physical and digital worlds.” (An EU initiative on Web 4.0 and virtual worlds: a head start in the next technological transition, 11 July 2023).
2. Dimension at EU- Level
Ursula von der Leyen, President of the European Commission, stressed the high priority of this field of activity in her State of the Union Address delivered on 13 September 2023: European funds needed to be invested for the access of European companies to key technologies in everything from microelectronics to quantum computing and AI.
First steps both in financial and in regulatory terms are to be expected soon: The “First EU Report on the State of the Digital Decade” as of 27 September 2023 already analyses the “progress towards achieving the digital transformation to empower a more digitally sovereign, resilient, and competitive EU”.
3. Practical Dimension
The emerging developments towards a metaverse business environment already lead to first consequences in certain markets generally and for specific “use cases” in particular, such as in the procurement, services and product development sectors.
Current trends in the “virtual reality” are for example green development, green production, experimental marketing and creator economy.
First consequences for the “real world” can be seen in examples such as socalled “digital twin factories”, i.e. cyberphysical production facility systems, or “connected supply chains”, where auto-mated risk control turns into a dynamic supply network establishing more transparency across the entire supply chain, increasingly based on Smart Contracts.
4. Legal Dimension
Both technical and legal aspects of the metaverse will also lead to further developments in the legal framework of international trade. A decentralized data storage, often independent from any physical seat of business, is held to be key for a functioning metaverse. As a virtual environment blending both physical and digital worlds, the metaverse will defy any purely national legal evaluation.
In the current absence of specific national statutory law, of supranational regulations such as on EU level or of international treaties and conventions, part of what good business judgement requires is sufficient contractual stipulations, which inter alia includes
+ provisions on rights and duties,
+ on which law is applicable and
+ the available legal recourse, may it be to specific state courts or to arbitration.
We will address important aspects of the metaverse such as these in separate blog posts.

Should you have questions, please do not hesitate to contact us.

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