THE NEED FOR CONTRACTING REGULATIONS IN META VERSE BY - ITUSHREE BISWAS & PROF. KHUSHBOO MALIK
THE NEED FOR CONTRACTING REGULATIONS
IN META VERSE
AUTHORED BY
- ITUSHREE BISWAS & PROF. KHUSHBOO MALIK
College- Christ
(Deemed to be University), Delhi NCR
ABSTRACT
Meta verse has been one of the
emerging trends in the technology world. CEOs like Mark Zukerberge or Satya
Nadella says that Meta verse is the future of Internet. The metaverse is a newly developed 3D capable digital environment
that make use state-of-the-art internet and semi-conductor tech as well as
virtual and augmented reality. This article discusses from the very first
instance in which VR impersonate a real life world without requesting any form
of legal identification or proof of age from their users they just need a
virtual reality headset for entering into complete different world which
functions almost like real world. An user can make their own avatar
without signing into contract of agreement, use them freely
and they do have almost all the possibility access
over everything in the world of meta verse, which also includes the virtual
assets. In this situation the most vulnerable and has the highest rate to get
affected the most are the children who can easily get involve in any kind of
undesirable situations that could have an impact on their psychological
well-being, but these acts of the children would impose no liability over them
particularly because there is no concept of age criteria in virtual worlds
where avatars could also easily get hacked. This article briefly discusses
about the urgent need for the legal contracts in the virtual reality
environment to avoid fraud, misleading circumstances or any kind of illegal
acts, where all standards for the legal contracts should be met.
Keywords- 3D Virtual reality, Metaverse, Legal issues, Legal contracts,
Agreement, Illegal acts.
INTRODUCTION
“Man is born free and everywhere he is in chain”
Imagine the future of the 3.0 Web era and an imagination tale that
unspectacularly moving towards the real world1. In a very prominent
manner, fiction has always served us as a type of
virtual reality, a doorway to phenomenally new experiences, cultures, places. Virtual reality,
in present like Metaverse poses a great ultimatum to usurp these
fundamental roles of fiction which should be limited to virtual and fictional
only2.
The purpose of this article
concentrates on entering
into the metaverse, rather than focusing
on the routine activities of the same, where a person does not need to enter into any kinds of terms
and conditions.3 An user only needs a gadget which has high
resolution display, a formidable graphics card and a quick processor to enter
into metaverse, and it is good to sail into new world.4
Today, the human species has stepped into the epoch, i.e. an era
dominated by electronic communication which has become an independent medium
functioning equidistant with the physical world but not with basic laws
somewhere. Picture the Mohiri Bibi vs. Dharmodas Ghose case, taking place in
Metaverse instead of the real world where the person in front of you does not know anything regarding the real identity
of person with whom you are interacting to get involve with in any
aspect. Homogeneously, in the metaverse there is no existence of any built-in
terms and conditions, so that users could meet all the pre-requisite for a
valid agreement such as real age, legal competencies of the parties, legal
relationships etc., as metaverse is not only made for mere interaction but as
it mimics the real world, it does deal with circumstances where the contractual obligations with valid legal documents
is mandate in real but it does not exist in
Metaverse5. By signing into such types of
legal agreements it becomes easier to identify the person disguised as avatars in the event of any kind of illegal act committed.
1 Jignen Pandya,
Web 3.0 The Future of Internet, https://www.expertappdevs.com/blog/web-30-the-future-of- internet , July 19, 2023.
2 Syed Adnan Ali & Rehan
Khan, From Science
Fiction to Reality:
An Insight into the Metaverse and its Evolving Ecosystem, Preprints,
10.20944/preprints202302.0224.v1, February 2023.
The end-in-view of metaverse is not only limited to just human
interaction but now it also includes the ability
for the users to purchase
virtual good using solely crypto
currency payment which itself is not free from legal scrutiny
and still discussion upon this goes on. Now showing
concern, why the contractual obligation in metaverse should be first
and foremost requirement and must be included
for smooth functioning, as there is high probability where children under their legal age who is
psychologically, physically, and spirituality not thrived to enter into the
augmented world and unknowingly commits or get involve in some actions that may
have an adverse effect on them without
understanding the reverberations of their act. The virtual
reality platforms which is transfiguring the fictional world into a
reality where requirement of the people to
enter into agreements should be must, to avoid any kind of friction in
this new aeon of Web 3.0, at some point, be supported by law- is extremely
discussed in this article.6
BACKGROUND
The simple explanation of term Metaverse is “beyond universe”, where it
is been elucidate as an immersive, always-open virtual 3D environment where
avatars are the nexus between two human begins to have a conversation, where
they engage in entertainment, transact, and conduct other activities, also
involves trading of digital assets, or operate while you are just sitting at
home and relaxing7.
If we look into the accessibility of the metaverse, there is no criteria
to enter into, a person would only require
a Virtual Reality
Headset, high distinctive glasses, or any other specialized gadget8. Mark Zuckerberg has referred to it as the “holy grail” of social engagement,
where it will be an online phygital
environment i.e. a fusion of virtual and physical reality9.
If we see the behind story of
this new tech, it all pioneered in 1838 when scientist Sir Charles Wheatstone devised the notion of “binocular
vision” where a person can easily combine two
6 Ayush Abrol, “Web 3.0 vs. Metaverse: A detailed comparison [UPDATED]”, https://www.blockchain- council.org/metaverse/web-3-0-vs-metaverse/ 27 September, 2024.
images- one for each eye- to create a single three-dimensional picture10. Therefore it can be traced that the
current technology involves the same idea as this one.
An American fiction that is
Pygmalion’s Spectacles written by Stanley Weinbaum which got published in 1935,
where the protagonist uses a set of spectacles that provides taste, smell,
touch, sight and sound to explore a made-up universe11. The Proto-meta verses
have been long existed, and this notion is worn. It
all developed and brought when the science fiction novel “Snow Crash” has been
published in the early 1980s and 1990s augured the arrival of metaverses and
the virtual world gaming experience confirms these predictions.12
TECHNOLOGY
If we briefly look into the technology of this, then tracing from how our civilization has passed
three communication epochs
in the journey of the history; started
from verbal, when ideas was only split orally among the people,
then comes along verbal and sign when knowledge was shared in both ways
verbally and via the use of distinctive symbols which had symbolic meanings.
Letters, words, deeds and occasions in both forms written and spoken
during the time of emerging of books. At
this point of time, the humanity is on fourth stage typify as electronic
communications, in which combining of technologies to facilitate information
and communication with earlier methods of communications13.
The transition from superannuated computers
to meta-universal tech has also happened in this
point in history, which has become a scientific phenomenal hub for advancement
of society which is currently serving as a generator of new suppleness, a
modern tech battery and becoming a tool for people to survive which is working
parallelly to human real-life world which is necessitating some reconsideration
in today’s world.
https://www.forbes.com/sites/bernardmarr/2022/03/21/a-short-history-of-the-metaverse/?sh=4ad74f255968 21
March, 2022.
https://www.indiatoday.in/cryptocurrency/story/what-is-metaverse-a-brief-history-of-the-metaverse-2308302- 2022-12-12 (last visited 12 December
2022).
12 Council of the EU, Analysis
and Research Team, “Metaverse-
Virtual World, Real Challenges”, March 2022.
13 Barry M. Kroll & Roberta
J. Vann, “Exploring Speaking- Writing Relationships: Connections and Contracts.”
Education Resources Information Centre(ERIC), 1981.
In today’s sate from the eye of technological advancement, metaverse is widely regarded as an
impactful advancement of the internet towards ‘Web 3’ where people are
empowered and actively involved in making virtual worlds.14
If talking about the later development of the 3D virtual worlds such as
the game World of Warcraft, video games were the first to prove the fantasy realm,
which has now fused a variety
of technologies to produce an immersive experience. The next more comprehensive stap in this development is the tech of metaverse.15
The technologies which have been used to fabricate this immersive
experience they are, augmented reality (AR), which displays the real world
enhanced by computer-generated elements like graphics, and virtual reality
(VR), which is a three-dimensional online environment and for entering into
that one must require a dedicated headset connected to the game console16. An user is then gains the ability
to make an avatar for himself and then appear in any way they choose17. And
speciality enhances the immersive experience in high-quality depicted therein. As the
AI is the root of these high built tech, so metaverse is completely the
result of AI where it is highly
depended upon the strong connectivity of Internet18.
The tech also involves like AR/VR,
holograms, XR platforms, distribution registers, and other cutting- edge
technologies, quantum technologies, neural works etc19.
These high-tech where human are involved immensely, it goes without
saying about the legal regulations as a result there are multiple precedents
for the application of any prominent provisions to resolve legal uncertainties
in this duplicate version of real life. The precedents include the
establishment of virtual asset ownership, the purchase and sale of virtual
asset, liability for misappropriation of virtual assets with sign of moral
violence and discrimination, propagation of racist and fascist ideologies, etc.
14 Muhammad Zahid Iqbal
& Abraham G. Campbell, “Metaverse as Tech for Good: Current
Progress and Emerging
Opportunities”, Virtual Worlds, 12 September, 2023.
15 John David N. Dionisio, et all, “3D Virtual
Worlds and the Metaverse: Current
Status and Future
Possibilities”,
Electrical Engineering & Computer Science
Faculty Works, June,
2013.
16 Abdullah M. Al-Anshi,
et all, “Analyzing augmented reality(AR) and virtual reality
(VR) recent development in education”, Social Sciences & Humanities Open, Vol 8
Issue 1, 2023.
17 Kim Szolin, et al, “I am the character, the Character is me”: A thematic analysis
of the user-avatar relationship
in videogames”, Computers in Human Behavior, Vol 143, June 2023.
18 Mona Soliman et al, “Artificial Intelligence Powered Metaverse: Analysis,
Challenges and Future
Perspective”, Artificial Intelligence Review 57(2), 2024.
19 Amar Johri et, all, “Crafting The techno-functional blocks
for Metaverse- A review and research agenda”,
International Journal
of Information Management Data Insights, Vol 4, Issue
1, April 2024.
Moreover, afresh standpoint takes on this topic for the need of basic
legal regulation such as contracts, where in this platform the use of
identification(personal) data, which will serve as the foundation for the development and operation of virtual avatars
or electronic humanoids in metaverse20.
Bearing this in mind strongly, how important is to identify
the real person
hiding behind the veil and working with them so closely
on negotiations on the purchase and sale of virtual assets, in this world of
metaverse where there is no big deal to enter without any kinds of agreements
or contracts to get into which is utmost important for human existence, herein
metaverse the actual
human are swapped
with avatars and they communicate within and there is possibilities where if the way
it is communication in metaverse in real world it might be
considered as illegal.
The Missing
Link of Contractual Regulation in
Metaverse.
In this parallel universe of metaverse which has expanded into a thriving
virtual environment, there is
only requirement of a smart device to enter into and stay there without having
to sign any paperwork or commit to any form of long-term commitment21. A metaverse is a collaborative
virtual world that is accessible to all users over the internet, resulting from
the convergence of virtual and physical reality.22
Metaverse is a distinct reality which makes the users acquainted with an
immersive virtual environment where they can engage with other players, go to
various location and even make transactions.
Until now for any kinds of transaction the basic requirements of contracts should meet in the case of purchase and
selling23. But herein, even the basic
requirements of smart contracts are not met. The smart contracts is nothing more than a code,
which itself is a full of
flaws, frequently erroneous, and it is easily manipulable to the coder’s
desire. There is no
20
“The Metaverse: The evolution of a
universal digital platform”, https://www.nortonrosefulbright.com/en- us/knowledge/publications/5cd471a1/the-metaverse-the-evolution-of-a-universal-digital-platform , November 2022.
March, 2024.
22 Jackie Wiles, “What is a Metaverse? And Should You Be Buying In?”,
https://www.gartner.com/en/articles/what-is-a-
existence of trust, or, privity in them therefore many question arises
when it comes to the contractual obligation in metaverse24.
Seeing from the prospective of Bitcoin and crypto assets
which started a spectacular pace where
these assets have transitioned from being a niche commodity used by cypherpunks to having a more popular presence as tools for
savings and investments due to their amazing rate of adoption and increase in
market capitalization25. For an instance,
Bitcoin and crypto currency assets are currently in legal uncertainty in India;
they are not prohibited, but their legal status is still up for debate26.
Particularly seeing from the perception
for the refunds of disagreements between retailers and consumers are generally cannot be
recovered as the sufferer cannot provide substantial legal proof to recover damages in any case of
breach and may not find any kind of legal alternative for the
loss he suffered27. There will be
increment of financial fraud and data theft which are the most emerging legal
issues, and the current legal issues might not be sufficient to handle the
financial fraud and data theft that come from crypto currency assets28.
Using the tech of
crypto currency which is still not fully regulated
and using it for any kind of transaction on other platforms like
metaverse, seems undoubtedly hazardous29.
As the environment changes overtime,
there is a chance that while you are sleeping
in real life, virtual
neighbours might be eating or dancing in your so called
virtual house; virtual
weddings might take place
at real water cooler; and through supper
a new social structure might form, and when
you return home, you track down that your neighbour’s infrastructure and atmosphere have
https://www.deccanherald.com/opinion/the-metaverse-is-coming-is-our-legal-system-ready-1130392.html , (last updated 27 July 2022, 8:30 IST).
25 Roshan Iyer & Adina Popescu,
“New Evidence on Spillovers Between Crypto Assets
and Financial Markets”, International Monetary Fund
(IMF), September, 2023.
26 Nikita Tambe &
Aashika Jain, “All you Need To Know About India’s Crypto
Bill”, https://www.forbes.com/advisor/in/investing/cryptocurrency/crypto-
bill/#:~:text=Is%20Cryptocurrency%20In%20India%20Legal,is%20done%20at%20investors'%20risk. ,
(Updated: 2 April 2024, 3:37pm).
27 Alan Schwartz and Robert E. Scott, “Contract Theory
and the Limits
of Contract Law”, The Yale Law Journal, Vol 113, No. 3, December 2003.
28 Mohammed Roshan Aslam, “3 Legal And Regulatory Challenges Surrounding the Use of Cryptocurrencies”,
surrounding-the-use-of-cryptocurrencies/articleshow/102137752.cms?from=mdr (last Updated: July 26, 2023,
3:59 PM.)
29 “The Pros and Cons of Using Crypto in the Metaverse”, https://sdlccorp.com/post/the-pros-and-cons-of- using-crypto-in-the-metaverse/ , 5 March, 2024.
completely altered. In VR everything changes within fraction of seconds
and using those platforms like crypto currency which is still a controversy is
kind of inviting more risk.30
In the world of metaverse the atmosphere changes with the blink of an
eye, suppose a person bought a virtual
land with crypto currency
even though he executed a smart contract,
it can be easily manipulated by any person in real life who is in the
metaverse as avatar. Seeing the loophole, the strong contractual regulation is
completely missing and identity theft can be easily done as there is completely
no requirement of any identity proves before entering into VR.
Virtual worlds are not real, they are fictitious, imaginary, intangible
and invented but they do exist and not everything that is made up or imagined is wholly outside
the scope of the reality. If they did, then everything
that humans have done and produced- including structures, languages, and most importantly for our purposes, laws- would have to be eliminated from the
world31. They are duplicating the real
world therefore laws must also be imposed in VR too. Jurisdiction in Metaverse comes later, but the contractual obligations between persons
need to be there in order to build social contract.
In order to be in harmony and without any difficulties,
they defined and un-modulated contracts should not happen and proper contracts
with legal binding should happen where strong contractual bonding must occur
between the real person and the avatar, they make for themselves as well as between
two avatars.
Age Becomes the Factor.
In every kind of
a valid contract which will
be legally binding on both the parties,
age of both the person plays crucial role, which cannot be seen in
Metaverse, which means children can easily enter with any wearable devices.
Here, where children can easily get access to, companies don’t deliver the
safety services they guarantee and there is a potential harm that virtual
environments and platforms can do to kids’ mental
health and unfounded32.
30
ET Spotlight Special, “Metaverse, NFTs,
and Crypto tokens: Here’s why investors should know about their relation”, https://economictimes.indiatimes.com/markets/cryptocurrency/metaverse-nfts-and-crypto-tokens- heres-why-investors-should-know-about-their-relation/articleshow/89320390.cms?from=mdr , (last updated: February 3, 2022, 3:12 pm IST).
31 F.Gregory Lastowka and Dan Hunter,
“The Laws of the Virtual Worlds”, California Law Review,
Vol. 92, No. 1,
January 2024.
32 “Children and Technology: Positive and Negative
Effects”, https://online.maryville.edu/blog/children-and- technology/#back-to-top , January 18, 2022.
The three fundamental
components of the metaverse are standardization, interoperability,
and existence33. Youngsters, who
are influenced by technology more than their parents, tends to create and
design everything in their own way as they acquire new skills and finds it
interesting34. But concerns
over adherence to the children’s regulations are also crucial, therefore it is important
to take precautions to guarantee that the users data belonging between the age of 13-15 is not acquired without express
agreement and removed upon request35.
To put it in some other way,
metaverse is a resolute, an ongoing multi-users environment that blends digital
virtually and physical reality, or a post-reality cosmos36.
The tender age of children can get adversely affected by this distinct feature
of metaverse, as they can be easily trapped
by any person disguised as avatar. Metaverse is not limited
to gaming platforms, where every child can only play,
but here the children gets a chance to explore
the world by just sitting at one place, where they discover
things about the world, bodies, relationships and see how things works and pick
up moral and social ideals37. Furthermore, it
can be said to be the best setting for the development of the child’s bod,
mind, and personality.
As technology concurrent with the advancement and proliferation of technology, the notion of “digital games” has suffered and
youngsters are drawn to play games more frequently which involves risks, issues
and advantages38. These
spellbinding games has altered completely the play routines and perceptions in
children’s mind. Seeing the advancement of technology and prompt change
also showing the change in human’s behaviour
and this process
effects the
33 “The Three Key Aspects of the Metaverse”, https://business901.com/blog1/the-three-key-aspects-of-the- metaverse/ , Business Development
Qualitative & Quantitative Research Lead Generation & Acquisition
Scenario Planning, May 31, 2022.
34 Francesca Gottschalk, “Impacts of Technology Use On Children: Exploring Literature on the Brain,
Cognition and Well-Being”, Organisation for Economic Co-operation
and Development, 31 January 2019.
35 “General Comment No. 25 (2021)
on Children’s Rights
in relation to Environment”, Convention on the Rights of the Child, 2 March 2021.
36 Simplilearn, “What is Metaverse Technology? : An In Depth Guide
to Its Potential”, https://www.simplilearn.com/what-is-metaverse-technology-
article#:~:text=The%20Metaverse%20is%20basically%20a,that%20is%20continuous%20and%20enduring. , (last updated: Feb 13, 2023)
37 Tom Huddleston Jr., “’This is creating more loneliness’: The Metaverse could be a serious problem
for kids, experts say”, https://www.cnbc.com/2022/01/31/psychologists-metaverse-could-be-a-problem-for-kids- mental-health.html , 31, Jan 2022, 9:00 AM EST.
Mediating Role of Executive Function and Age-Related Moderation”, National Library
of Medicine, 11 October,
2023.
children on the first basis.
Which later addresses the issue of anxiety, depression another mental issue
son a very early stage39.
On the other side of the coin, the digital world’s skill is something
that both home and the school should encourage
to learn the tech. Children
and adults have access to an endless
supply of media information through electronic gadgets in the house, but
these materials may be dangerous as well as helpful. By ten million of kids and
teenager, the virtual and gaming platforms are being used by them and it still
remains unclear how virtual worlds will develop and if metaverse would be a
real deal or would simply be the hype40.
It also has a high possibility to involve employment, leisure, interacting
with others, learning and also
handling money. This unique intersection of new technologies, virtual
marketplaces, social networks, gaming and professional workplaces, the
metaverse may be a parallel digital universe that extents beyond and replicate
the real world41.
According to a US survey,
by 2027, respondents from Generation Z those born between 1997- 2012 anticipate spending 4.7 hours a day in metaverse area42. This paper shows that depending upon the development of the
advance tech and design, the XR tech and metaverse has significant opportunity
but also raises concern for kids43.
The advancement would bring forward new possibility in fields like identity
information, social interaction, and the delivery of healthcare and education, alternately, they might usher in “an era of constant
reality capture” in which
they would be profiled, monitored, and influenced like never before through
data collecting on their body-language, facial expression, and eye tracking44. They might worsen the shortcomings of the current
strategies for content
moderation and kid safety online,
or they might inspire new
ideas for ensuring security in intricate virtual environments.
We can also pick up tips
from previous strategies for reducing these technologies’ detrimental effects especially on children and youngsters45, in order
to inform our thinking about the future,
39 Virginia Lerida-Ayala et al., “Internet and Video Games:
Causes of Behavioural Disorders in Children
and Teenagers” ,National Library of Medicine, 31 December, 2022.
43 Ibtihaj EI Dandachi
et al., “XR and the Metaverse: New Opportunities in Education”, September
2023.
this report thus put forward-looking and grounded in the present. It does
this by drawing on current research, technical breakthroughs, and regulations.
CONCLUSION
Innovations is like an opening
to a universe of uncountable new opportunities and possibilities
and among these ones is the Metaverse which allows users to access virtual as
well as augmented reality, and can be easily understood as a comprehensive
world of interconnected virtual locations. Well until now, it can be easily seen that metaverse is much more than just a
network of linked virtual worlds where real and virtual life emerge together.
The smart contracts which can be easily manipulable, the metaverse cannot work
in that circumstances which imposes and unseen risk at every point of time
which would lead to many illegal activities, risking the whole life of any
person immaterial of the age. Proper contractual obligation must be there where
all the essential elements of a valid contract which must be legal and bring it
to the jurisdiction with a proper valid obligations and identity of the person
can be easily traced to seek any kind of justice. This can be easily fulfilled if we as a user can completely
trust upon and gain faith in virtual reality as well as without any ambiguity.