Start Regulating the Metaverse Now, Researchers Tell French Leaders

The European Union’s handling of its key crypto legislative packages highlighted an “inadequacy and lack of expertise” that should not be repeated when forming rules for the metaverse, according to researchers commissioned by the French government.

While the country should not be quick to dismiss the metaverse, a superset of virtual, augmented and physical reality, it should hasten to try and regulate it, the researchers said in a report published Monday.

The report, spread out over 116 pages and split into two parts, is the result of an exploratory mission into the metaverse, set in February 2022 by members of the French government, including the ministers for finance and culture. The document outlines opportunities and challenges the metaverse presents and how France should approach the advent of virtual worlds.

“Don't throw the Metaverse baby out with the Facebook bathwater!” the researchers write in the report, pointing out that the conceptualization of virtual worlds predates Meta, the tech giant and aspiring metaverse builder formerly known as Facebook.

They warn that Silicon Valley’s “battle of perspectives” about whether the metaverse should, for instance, remain open to the general public or be limited to private groups, is indicative of what could happen should virtual worlds be rooted in “technologies plagued by isolating users from each other, and from the world around them.”

France defends an “open, free and secure internet” and this stance must also be reflected in the “diplomatic bodies and negotiation techniques on the future of communication technologies,” the researchers say.

The mission was led by Camille François, a researcher at Columbia University; Adrien Basdevant, a lawyer of the Paris Bar; and Rémi Ronfard, researcher at France’s National Institute for Research in Digital Science and Technology.

They called on lawmakers to “start now” on extending frameworks such as the European Union’s General Data Protection Regulation (GDPR) and the Digital Services Act (DSA) to cover data collection and user protection in the metaverse.

But they also warn against repeating blunders that marked the progression of the EU’s recently agreed-upon regulatory frameworks targeting crypto when setting up rules for the metaverse.

In their report, the researchers singled out the bumpy ride experienced by the draft Markets in Crypto Assets (MiCA) regulation – which was marked, for instance, by attempts to effectively ban energy-intensive crypto networks like Bitcoin in the bloc – and the overhaul of the Transfer of Funds (TFR) regulation, which sought to identify those who sent money from private digital wallets, as reasons why lawmakers should rely on experts to guide regulations.

“Otherwise the place will quickly be taken by industrial lobbies,” the report said.

The quotations have been translated from French.