[Document] JURI's Draft Report on Virtual Worlds
A brief explainer
12 October 2023—The European Parliament’s Committee on Legal Affairs (JURI) published a Draft Report on “Policy implications of the development of virtual worlds – civil, company, commercial and intellectual property law issues.”
The document sheds light on the nuanced legal challenges posed by the rise of metaverse environments. Its release follows the recent report draft from the Internal Market and Consumer Protection (IMCO) Committee, which focused on the broader policy implications for the single market in virtual worlds.
How did we get here?
24 June 2022: The European Parliament Research Service provides a briefing—Metaverse: Opportunities, risks and policy implications—for staff and members of Parliament.
24 April 2023: JURI holds a hearing on Regulatory Challenges of the Metaverse.
11 May 2023: JURI Committee announces its own-initiative procedure on “Policy implications of the development of virtual worlds – civil, company, commercial and intellectual property law issues.”
26 July 2023: Parliament publishes a study commissioned by JURI on the “Metaverse.”
19 July 2023: JURI discuss in committee the topic of virtual worlds
12 October 2023: JURI Committee publishes its Draft Report.
What is an Own-Initiative Procedure?
Own-initiative procedures — or “INIs” — allow MEPs to take the initiative on a topic without a concrete legislative proposal to scrutinise. An INI report often calls on the Commission or Council to act on a new policy area or request a revision or amendment to existing legislation.
Rapporteurs for this procedure
🇩🇪 Axel Voss | European People’s Party
🇪🇸 Ibán García Del Blanco | Progressive Alliance of Socialists & Democrats
What does JURI’s Draft Report say?
“With this draft report, the two Rapporteurs acknowledge the growing economic, social and even political importance of virtual worlds. […] This effort is meant both to indicate to the Commission the need to examine possible legal issues that are not addressed in its Communication and to serve as a basis for future work for the Parliament in the next legislature.”
Definitions
The report notes that the “metaverse” and “virtual world” concepts lack consolidation. The hotly-debated “Web 4.0” does not feature.
However, the draft welcomes the plural “virtual worlds” definition proposed by the Commission: “virtual worlds are persistent, immersive environments, based on technologies including 3D and extended reality (XR), which make it possible to blend physical and digital worlds in real time…”
Key points from the report
Offline = Online: If something isn't acceptable and legal in our daily lives, it shouldn't be allowed in the metaverse, either, and virtual world developers ought to align with the EU's foundational values and rights.
“Regulatory issues are already apparent”, in private international law, civil law, intellectual property law, and data protection. The EU needs clear guidelines governing the metaverse and regularly updated enforcement rules.
Private International Law: “Certain traditional territorial principles” might provide inadequate in the metaverse, especially for blockchain-based applications, and new criteria may be needed to define “consumers” within such environments.
Civil Law: Consumers’ expectations must be clarified, especially around ‘buying’ virtual property not protected by property rights (users are actually just obtaining a licence). The EU may need grant avatars a distinct legal status in the future.
Intellectual Property Law: Despite the existing EU law's robustness, new challenges are emerging related to enforcement and the evolving nature of assets like non-fungible tokens (NFTs) and AI-generated creations.
Data protection: VR sensor data is as distinct as fingerprints, revealing attributes like age, gender, and ethnicity. Given the profound ethical concerns this poses, there is a need for user consent both upon entry to a virtual world and with every use, in line with GDPR’s purpose limitation principle.
Equal access: Everyone in the EU should have equal access, considering factors like location, gender, education, and economic status. Digital literacy is of “utmost importance” for safely and responsibly navigating virtual realms and supporting democratic use. The EU’s upcoming 'virtual worlds toolbox' will help.
“AI-generated creations create new regulatory challenges for intellectual property rights protection.”
What is the Committee asking the Commission to do?
The report calls on the Commission to:
Examine the regulatory gaps in existing legislation and develop guidelines to clarify legal obligations and responsibilities in the metaverse.
Implement measures to detect cases of NFTs referencing trademarks without the owners’ authorisation.
Does this Report matter?
Although not a formal decision-making procedure, INIs allow Parliament to endorse or reject the Commission’s approach to a topic. While the Commission is not obliged to follow the report’s calls to action, it is hard to ignore for political reasons.
INIs are also a valuable indicator of Parliament’s priorities, interests, and concerns. MEPs involved in INIs meanwhile signal their interest and develop their expertise on a topic—strong candidates, therefore, to cover the topic in the future.
This text is a draft and will be altered before its final version is published.
What happens next?
The Committee will consider amendments to its draft before voting on the final report. The report will then be sent to the plenary, where Parliament will either endorse it—in which case it will sent to the Commission—or vote it down and end its journey.
Should the Commission receive the report, it has three months to submit a proposal on an issue the INI brought or notify Parliament that it will offer a legislative proposal. Should it decide on legislative action, a decision-making procedure will follow.
Expected timetable
26 October 2023—JURI to consider amendments
7 December 2023—JURI to vote on its report
January 2024—European Parliament plenary vote
You can find the EU’s metaverse files we’ve been tracking here.