Regulatory trends in the global metaverse industry

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Metaverse is gaining increasing prominence among businesses and consumers, alike. With more and more players entering the segment, the metaverse is expected to make digital experiences more inclusive, accessible, and immersive than what it is today. However, as the sector continues to grow and firms innovate in the digital realm, it is also projected to come under regulatory scrutiny by governing bodies around the world. TechInsight360 expects that a favorable regulatory landscape for the metaverse industry will unlock the true potential of the sector. A few of the countries have already started to lay down the foundation for enacting special metaverse laws. For instance,

• In September 2022, the Ministry of Science and ICT (MSIT) South Korea, announced new regulations for the metaverse sector. Notably, the new regulations announced by the ministry are projected to encourage widespread adoption of the metaverse in South Korea. The MSIT announced that it is moving away from the plans of imposing traditional video game regulations on the metaverse sector.

Over the last few years, South Korea has actively taken initiatives to make the metaverse ecosystem more robust. The country also raised US$200 million to establish a national Metaverse. This investment from the South Korean government shows its commitment to promoting and developing the metaverse ecosystem in the country. Over the next few years, the South Korean government is planning to invest 195.4 billion won in the sector to support the growth of metaverse-related businesses and to protect users’ rights.

Like South Korea, the Chinese government is also seeking to make big strides into the NFT and metaverse sector. For instance,

• In July 2022, the Shanghai government announced its five-year digital economy plan, which included emerging technologies such as NFTs, Web3 technologies, and the metaverse. Across China, the local governments have announced the proposal of 45 policy documents that support the development of metaverse-related industries.

The favorable regulatory landscape announced by the South Korean and Chinese governments is projected to support the growth of the metaverse industry from the short to medium-term perspective.

Notably, privacy in the metaverse is going to be one of the key focus points for regulators around the world over the next three to four years. Currently, there are already shopping activities taking place in the metaverse. Large conglomerates such as Alibaba have launched metaverse shopping marketplaces, allowing online shoppers to purchase products in the digital world.

As more and more players enter the metaverse shopping segment, buying and selling will increase around the world, and this will lead to privacy becoming a key issue for regulators to deal with. TechInsight360 expects that most of the digital privacy and security restrictions of Web 2.0 will be expanded to the metaverse industry, however, it is expected to take some time before the laws are enacted.

Web 2.0 has also caused a number of copyright issues for movie studios and musicians, and the evolution of the metaverse will also have its own set of copyright issues going forward. While the nature of the technology will offer protection to original creators, TechInsight360 expects challenges to emerge when it comes to copyright protections. All of these are the different factors that regulators will have to consider when developing a favorable regulatory landscape for the metaverse industry to grow and innovate over the next three to four years.