How Europe is Regulating the Industrial Metaverse

This week, the European Commission (EC) launched a regulation initiative to stimulate competition within the XR space, notably enterprise-grade metaverse services. The regulations aim to stop big technology firms from dominating the space, in line with the EC’s values and fundamental rights.

The EC is aiming to promote an open and interoperable metaverse future whereby various companies, big or small, can take part in creating a shared foundation for immersive web services.

The group also is setting up regulatory sandboxes which invite creators, media companies, and enterprise end-users to promote an industrial metaverse space supporting numerous use cases.

Commission Vice President Margrethe Vestager added:

We need to have people at the centre and shape it according to our EC digital rights and principles, to address the risks regarding privacy or disinformation. We want to make sure Web 4.0 becomes an open, secure, trustworthy, fair and inclusive digital environment for all.

In a study the EC published in March, the group expected that the market for virtual worlds and the metaverse will grow from its €27 billion valuation in 2022 to over €800 billion by 2030.

“Today, Europe throws its hat in the ring to become a world leader in Web 4.0 and virtual worlds,” said Thierry Breton, Commissioner for Internal Market.

Breton also notes that the EC is taking a “competitive edge”, bringing the EC’s metaverse support to the “next level” as the group aims to “connect virtual world developers with industry users, invest in the uptake and scale-up of new technologies, and give people the tools and the skills to safely and confidently use virtual worlds.”

The Commissioner added:

Europe has what it takes to lead the next technological transition: innovative start-ups, rich creative content and industrial applications, a strong role as a global standard-setter, and an innovation-friendly and predictable legal framework.

Four Key Pillars to Regulating the Metaverse

As part of its more comprehensive Digital Decade policy programme, the EC is building its regulatory metaverse guidelines to promote digital skills, business, infrastructures, and public services.

Moreover, the guidelines provide openness and global governance to companies adopting metaverse solutions.

Empowering the Public

Firstly, the EC empowers people by reinforcing the skills needed to leverage industrial metaverse solutions. The group fosters awareness by promoting a wealth of resources and a talent pool to work on metaverse services.

According to the EC, the group will also promote guiding principles for the metaverse via a Citizens’ Panel, whereby the general public will develop its guidelines. Additionally, the EC is establishing a Citizen Toolbox ready for the first quarter of 2024 to assist the public in leveraging and understanding metaverse services.

Dubravka Šuica, Vice-President for Democracy and Demography, also added:

The recommendations of the European Citizens’ Panel on Virtual Worlds have had a determining impact on the outcome of this initiative that is adopted by the Commission today. I am so glad that the work we have done to deepen citizens’ engagement, and to make it meaningful for our work, is bearing such fruitful results. When we said: “The Future is in Your Hands”, we meant it!

The EC is also working with Member States to help build a talent pool for women XR and metaverse developers. The EC is getting funding from Digital Europe Programme and further assistance from the Creative Europe Programme to support its inclusivity initiative.

Supporting an EC Industrial Ecosystem

Moreover, the EC appears to be readying up for a long-term relationship with web3 and the metaverse by laying out plans to support emerging web technologies through to web4.

The EC is looking to scale industry excellence and address fragmentation. To support businesses going towards a metaverse future, the EC is setting up a regional industrial ecosystem that brings together different end users to increase the value of virtual worlds.

The EC also proposes a candidate Partnership on Virtual Worlds under Horizon Europe, ready for 2025, potentially promoting research and development (R&D) into metaverse services. The group wants to develop a roadmap to foster growth as emerging immersive solutions evolve.

EC creators and media companies will also get the opportunity to test new XR content creation tools with additional resources, mentorship, and the EC’s regulatory sandboxes.

Support Virtual Public Services

Within its industrial roadmap vision, the EC aims to support public service workers as XR technology grows globally as a tool for this use case.

To understand XR’s opportunities for public service firms, the EC is investing significant R&D into technologies that will advance scientific and industrial workflows.

The EC’s R&D team is developing “precious applications” to help public service workers. For example, the EC is developing immersive solutions to help with numerous use cases, like helping authorities make critical public-policy decisions.

Moreover, the EC is developing tools such as Destination Earth (DestinE) that will create a digital twin of Earth, Local Digital Twins which support smart city developments, European Digital Twin of the Ocean to support scientific research, CitiVerse a metaverse urban environment for city planning/management, and European Virtual Human Twin a healthcare tool for supporting clinical decisions and personal treatment.

Setting the Global Benchmark

By setting a regulating standard, the EC looks to lead by example.

As the metaverse and industrial use of XR is growing worldwide, many audiences still do not understand it. In a recent study, Gartner Director Analyst Tuong Huy Nguyen noted that adopters lack a proper understanding of the metaverse based on his research.

The EC looks to shape that understanding of the metaverse with its global standards, ensuring competition, growth, and understanding for all industry players.

Moreover, the EC works closely with global internet governance stakeholders to promote the metaverse standards and expectations.