Event Recap – The Legal Implications of the Metaverse

Article by Sophie Sklar

On March 9, 2023, the Nathanson Center hosted the symposium event, “The Legal Implications of the Metaverse”. This symposium brought together scholars from across Osgoode Hall to think about technology and the law and reflect on how the law can respond to the next generation of emerging technologies. This included discussions of AI, Web 3.0, blockchain and all of the enhanced connectivity that the metaverse attempts to provide.

The event began with remarks from event organizer, Valerio De Stefano. Valerio introduced the idea of the metaverse – a virtual space connected by several platforms that use emerging technologies to create an immersive internet experience – and emphasized that lawyers and scholars have a duty to be prepared for whatever new societal forces the growth of the metaverse will create. 

Carys Craig

Carys Craig highlighted various conundrums and debates surrounding Intellectual Property in the Metaverse.

Craig explained that everything that creates the virtual word is intellectual property and every part of the user interface can be a separate artistic copyright work. When businesses start selling in the metaverse, consumers consume, which creates layers of IP challenges. Further, Craig explained which jurisdiction’s complex national IP laws will apply in the metaverse. She questioned if all appearances, uses, and reproductions of products in the virtual world should subject to all the same IP of their real-life forms.

She concluded her remarks by presenting a topical quotation by Frank H Easterbrook, who wrote: “Let us not struggle to match an imperfect legal system to an evolving world that we understand poorly”.

Barnali Choudhury

The conference next heard from Barnali Choudhury, who discussed issues relating to business and human rights in the metaverse. She questioned if business have different responsibilities for human rights protection in the metaverse than they do in the physical world.

Choudhury first analyzed potential benefits of the metaverse for human rights: such as the right to freedom of expression and the right to healthcare that could be improved by certain technologies in the metaverse.

However, she also explained that the metaverse poses risks to human rights, such as threats to data privacy. She explained that metaverse technology can capture tremendous information about us through tracking voice patterns, body movements, and eye movements. The biometric data collected can then make inferences about us. She explained, we may simply enter the metaverse to enjoy a game.. and we may reveal intimate portraits about our lives without even knowing it”. 

Choudhury’s presentation also questioned whose role it is to regulate the metaverse for human rights abuses, and the uncertainty over who has sovereign authority to provide human rights protection in the metaverse. She explored the possibility of businesses having enhanced obligations to protect human rights in the metaverse, and the implications this would have.

Ivan Ozai and Jinyan Li

Next, Ivan Ozai and Jinyan Li explored tax challenges, tax policy implications, and possible new tax rules presented by the metaverse. Ozai explained that when considering tax law, new technologies typically do not create new problems, but instead, usually exacerbate existing problems. Ozai highlighted that in the metaverse, we don’t exactly know what we are taxing, and our tax system was designed for the physical world. He highlighted the jurisdictional challenges of tax law in the metaverse, stating: “Because we are talking about digital things, it’s hard to determine where these things are taking place” and “When we don’t have materialization it’s difficult to determine… who we will tax”. For instance, cryptocurrency is not a national currency, so it is difficult to estimate how much to tax it. 

Jinyan Li questioned how to marry the metaverse and tax in the legal world. She noted that there is no new law to deal with metaverse transactions, so existing laws must apply to this new phenomenon. She stated, “when the laws are unclear in terms of the metaverse transactions, there are uncertainties… in how to report transactions”. Li highlighted that it is hard to impose existing laws on the metaverse and that the legal world is struggling to keep up. This creates a multitude of tax policy implications: potential loss of revenue, unpredictability in the business environment, unequal treatment of taxpayers earning income in the real and virtual worlds, and tax evasion, among others.

Jon Penney

Jon Penney offered a discussion on virtual world privacy lessons for the metaverse and beyond. Penney advocated for a change in scholarly emphasis on privacy priorities when studying the metaverse. He said that currently, there is too much of an emphasis on the study of data leakage, which was concern that information about your anonymous avatar would link to your real-world identity. He explained that this is less of a concern now, as algorithms don’t care about the differentiation between your real and virtual identities. Penney presented that privacy scholars today need to be concerned with “how data from virtual worlds will be used to manipulate you online and offline as well”. Further, the current Canadian data protection regime has many gaps and holes, which leaves questions as to what will regulate the metaverse.

Dan Priel

Next, Dan Priel provided an insightful presentation on tort law in the metaverse, and how the metaverse will affect tort law in profound ways. Priel explained that when it comes to tort law, “many things we are familiar with from the outside world… we’ll have [in the metaverse].” This includes identity theft, defamation, and harassment. Priel stated tort law has an advantage over the other areas of law discussed, as the foundations of tort law are vague enough and not based in statute to be able to expand to the metaverse. Priel also touched on the disembodiment and de-individualization that the metaverse creates, and the potential this has to magnify the harm that stems from any harassment or tort law breaches that occur in the metaverse.

Valerio De Stefano

Finally, Valerio De Stefano presented an analysis of labour and employment law in the metaverse. His presentation mainly highlighted that technology is constantly monitoring what people do online. He noted, that “the risk is that technology in metaverse and VR will collect enormous amounts of data that will reveal to employers and managers whatever we are doing and feeling without any filter”. De Stefano’s main concern was that the constant monitoring of the metaverse can create a space for the subordinating employee/employer relationship of the workforce to extend beyond the physical office space.