Metaverse-based enterprises are no longer a new concept as more and more businesses enter the Metaverse. Join us as we walk you through the regulatory and legal implications for Metaverse-based enterprises.
In recent years, the concept of the Metaverse-based enterprises has gained traction.
When the buzz around “metaverse” experiences started, many entrepreneurs focused on the consumer market and the prospects for consumers to explore new digital domains.
However, as metaverse technologies have become more accessible and advanced, corporate executives are identifying new applications.
The Metaverse has begun to divide into distinct divisions, ranging from the industrial Metaverse, mainly fueled by digital twins, IoT, and XR, to the retail Metaverse utilized for marketing, customer service, and revenue creation.
In the coming years, advancements in Metaverse as a service platform, artificial intelligence, and extended reality headsets targeted at corporate users should fuel the expansion of Metaverse-based enterprises.
Understanding Metaverse-Based Enterprises
A Metaverse-based enterprise is a metaverse that provides prospects for corporate growth. Metaverse-based enterprises are immersive virtual places where firms can sell digital products and services.
They offer new digital options for businesses to reach global audiences, promote engagement, build meaningful connections, establish leadership prospects, train staff, and more.
A Metaverse-based enterprise appeals to millennials and Gen-Xers because it is a cutting-edge, sophisticated virtual platform.
Meta works on one type of Metaverse, whereas other software-focused groups develop several metaverse environments.
For example, Decentraland is a virtual real estate metaverse for buying and selling land; IMVU provides social networking, shopping, and hangout chances; and Roblox allows users to create virtual worlds.
Similarly, Metaverse-based enterprises of all sizes can construct specialized metaverses to power their activities on multiple levels.
Fashion companies, lifestyle brands, IT organizations, real estate firms, and other central and small enterprises might look for creative and cutting-edge commercial opportunities in the Metaverse.
Metaverse-based enterprises are a work in progress. As they gain popularity, they will change to create brand uniqueness.
Metaverse-based enterprises may make metaverses work for them in the most rewarding way by customizing them.
Marketplaces within metaverses will become important sources of revenue. New forms of digital services and goods will join the market, and competition for worldwide clients will drive economic advantages.
Use Cases of Metaverse-Based Enterprises
Though we are still in the early stages of studying the Metaverse-based enterprise’s potential, numerous opportunities have emerged. Workplaces around the world are rapidly changing.
Remote and hybrid work are becoming increasingly common, and businesses are searching for new ways to use immersive technologies to increase productivity and efficiency.
This means that Metaverse-based enterprises can alter every aspect of the workplace, including how firms operate. Let’s have a look at some of the important application cases.
- Engineering & product development
- Immersive and global customer engagement
- Marketing and sales within the Metaverse-based enterprise
- Employee onboarding and training
- Enhanced enterprise Metaverse collaboration
- More immersive virtual events
Engineering & Product Development
The industrial Metaverse is essentially a “sub-section” of the larger corporate metaverse environment.
Thanks to the proliferation of innovative IoT solutions, 5G connections, and generative AI, it is also one of the most rapidly expanding areas in this landscape.
Many pioneering businesses already utilize digital twins (a key component of the industrial Metaverse) to enhance engineering and development.
Companies can use digital twins for various purposes, including risk management, product creation, predictive maintenance, and remote monitoring.
The larger metaverse landscape also provides extra opportunities.
Extended reality can help engineers and professionals in the AEC business engage with consumers, share product demonstrations, and create photorealistic representations of tangible products.
In this scenario, the Metaverse can accelerate invention cycles, decentralize production, and improve immersive product testing procedures.
Immersive and Global Customer Engagement
One of the most significant advantages of the enterprise metaverse is that it enables businesses to broaden their worldwide reach and establish closer ties with customers.
The internet has already helped businesses overcome geographical barriers, yet there remains a significant gap between virtual and real-world encounters.
Metaverse technologies can bridge this gap by creating large-scale interactive, immersive, and 3-dimensional experiences.
They provide businesses with global access to clients and customers and the opportunity to experiment with products and services in previously impossible ways.
The Metaverse and extended reality allow enterprises to visit the exact digital locations as customers in real-time.
Organizations can walk clients through immersive onboarding procedures, assist them in troubleshooting common issues remotely, and even offer unique purchasing experiences.
Some vendors, such as Helpshift, are already impacting this market.
The Helpshift Metashift platform is intended explicitly for customer support in the Metaverse, allowing businesses to assist consumers in shopping, interacting, and experimenting with items from anywhere.
Marketing and Sales within the Metaverse-based Enterprise
Enterprise metaverse technologies, such as extended reality, are already prevalent in many marketing and sales activities.
Companies already use AR technologies like Snapchat to communicate with customers and market items.
They also use artificial intelligence to personalize advertising and sales methods on a large scale.
In the enterprise metaverse, businesses can build full marketing events in virtual worlds, allowing buyers to experiment with or “try” things before purchasing them.
They can connect sales personnel with consumers in the Metaverse or provide them with a lifelike avatar powered by generative AI.
Nike and Coca-Cola have already launched their metaverse marketing operations with impressive results. The Metaverse alters marketing and sales initiatives, opening up new revenue streams.
Companies can now sell NFTs, digital assets, and experiences alongside physical products, increasing sales prospects. Fashion firms like Gucci have their own NFT lines marketed alongside actual clothing.
Employee Onboarding and Training
Rapid technological improvements and talent shortages have made ongoing staff training and upskilling critical in recent years.
Unfortunately, hybrid and remote employment means that many firms fail to provide consistent training experiences.
The Metaverse and extended reality technologies open new potential for improved onboarding and skill development.
The Metaverse enables businesses to create immersive training experiences that improve knowledge retention and engagement.
They can allow employees to visit virtual replicas of real-world places, experiment with various forms of technology, and do duties safely.
Additionally, the Metaverse opens the door to numerous collaborative learning opportunities and the possibility of gamifying educational sessions.
The “educational metaverse” has garnered much attention worldwide, with several companies specializing in solutions tailored explicitly for skill development and information transfer.
As training initiatives expand with the support of generative AI trainers and innovative extended reality technologies, workplace metaverse training will likely become more widespread.
Enhanced Enterprise Metaverse Collaboration
Immersive collaboration is one of the most important enterprise trends spurred by the rise of metaverse technology. Many businesses seek to return more employees to traditional settings, but remote and hybrid work remain widespread.
Also, many businesses must consider field workers when ensuring their teams remain linked.
The enterprise metaverse enables firms to establish a supplementary “virtual office” where employees may effortlessly share knowledge and interact regardless of location.
With extended reality, businesses can bring teams together in interactive environments to collaborate on projects in real-time and engage on a more “human” level.
According to PWC, metaverse experiences can boost productivity and collaboration by 30%.
This not only enhances business culture and employee experiences, but it can also assist in lowering overhead expenses by reducing the amount of office space companies must invest in.
Plus, because enterprise metaverse systems may scale globally, businesses can get people from various locales, addressing talent shortages.
More Immersive Virtual Events
The Metaverse-based enterprise will probably transform businesses’ organization and management of events and conferences.
Many organizations have already begun experimenting with more immersive “hybrid events,” in which consumers can visit virtual versions of conference floors via extended reality.
The workplace metaverse may bring together the finest in-person and online events on a single platform.
With the correct technology, businesses can gain access to NFT-powered ticketing and registration systems, personalized avatars for digital events, and worldwide networking solutions.
Companies may develop completely interactive experiences that imitate the impression of attending in-person events, allowing customers to participate in product demonstrations and make purchases.
Adding a virtual element to events using the Metaverse also removes some of the restrictions of traditional events.
Businesses can host unlimited participants in the Metaverse, eliminating the need for travel and allowing them to connect with hosts and speakers who cannot attend a live conference.
Let us see the regulatory and legal implications for Metaverse-based enterprises without further ado.
Regulatory and Legal Implications for Metaverse-Based Enterprises
Here are some regulatory and legal implications for Metaverse-based enterprises.
- Property and intellectual laws
- Privacy and data protection
- Contract law and smart contracts
- Cybersecurity and cyberattacks
- Monetary and payment system laws
- Regulations for virtual assets
- Tax law
- Gambling regulation
- Criminal law
- Governance and ethics
Property and Intellectual Property (IP) Laws
While customary property law may not be entirely applicable because virtual objects cannot be physically located, intellectual property law may be more relevant.
It governs who owns intangible items like patents, copyrights, and trademarks, as well as the rights and benefits that come with them.
In the context of the Metaverse, this sort of law seeks to establish a fair, predictable, and transparent method of distributing rights to the usage of digital objects.
In the virtual world, ownership is typically classified into two types:
- All property belongs to the platform provider, who licenses users to use it. World of Warcraft is a fantastic example, as Blizzard owns all rights, including characters and virtual products.
- Users are permitted to possess some property, similar to Second Life, where users retain ownership of their intellectual property, such as copyrights.
The Metaverse only allows for the second form, where users can own land, currencies, and NFTs or tokens.
If the first sort of ownership were used, the Metaverse would be unable to attain its full potential and realize the objective of inclusivity and interoperability.
As a result, whether current intellectual property law is adequate to protect consumers’ ownership rights is complex.
While intellectual property law appears well adapted to the task, its application is limited due to difficulties like jurisdiction, choice of law, and cross-border enforcement.
As a result, these crucial concerns must be answered before we can properly control IP in the Metaverse.
Privacy and Data Protection
The Metaverse is supposed to be open and transparent. This poses many privacy concerns among its users:
The first issue concerns the unrestricted sharing of personal information. This occurs in virtual social interactions.
Unlike in the real world, Metaverse users do not have complete control over their personal information. Therefore, platform providers must prioritize user privacy through legislation.
Second, there is an infringement on property rights. Engaging in social interactions in the Metaverse might increase nosiness and curiosity, jeopardizing privacy.
Platform providers cannot limit the impact when there is a privacy breach. So, this is an issue that requires immediate attention.
The final concern is the protection of users’ data. Virtual world providers store and manage a vast amount of data, which causes control concerns.
Also, consumers often originate from a variety of countries. This makes complying with privacy and data protection rules across borders difficult. It also limits the ability of data protection agencies to intervene beyond their jurisdiction.
Contract Law and Smart Contracts
There are two sorts of contracts in the Metaverse.
- The first governs the interaction between platform providers and users. These include service contracts and end-user licensing agreements. However, these contracts do not adequately protect users. Also, no uniform treatment is provided across platforms.
- The second type oversees interactions among platform users. These may be consumer-to-consumer, consumer-to-business, or business-to-business. However, implementing consumer protection legislation in certain situations may be questionable.
Also, the Metaverse is a digital reality built on code. Therefore, adopting programmable smart contracts is advocated. It prioritizes pragmatism, efficiency, and adaptability over traditional contracts.
Cybersecurity and Cyberattacks
As the Metaverse evolves, cyber security risks become more prevalent. Risks include identity theft and financial losses due to security breaches.
Other major concerns include identity management, DDoS assaults, device vulnerabilities, and data exploitation. Providers must establish and reinforce their security measures to defend themselves from these threats.
However, few redress options and jurisdictional issues leave Metaverse users especially susceptible during breaches.
Monetary and Payment System Laws
Currency and central banking law are the two most important sources of legislation for the monetary and payment system.
Currency law oversees using currency as legal tender, whereas central banking law authorizes the central bank to regulate and oversee payments.
Most regulations establish their currency as legal tender and prohibit using other currencies or assets. However, the approach to cryptocurrencies varies per country.
For example, the United States, China, and Indonesia all have restrictions on their use within their territories.
Modern central banking laws are more uniform, intending to maintain price stability via steady inflation and exchange rates.
However, the growth of cryptocurrencies poses a danger to central banks’ effectiveness because they are private money issued and circulated outside of the central bank’s jurisdiction.
As a result, the Metaverse’s usage of privately produced cryptocurrencies, NFTs, and utility tokens may jeopardize the central bank’s capacity to carry out its tasks even further.
As a result, striking the correct balance between the individual liberties given by crypto and blockchain and the overall responsibility of maintaining economic stability is critical.
Regulations for Virtual Assets
Countries have different approaches to governing virtual assets. These restrictions often comprise one or more of the following:
- Crypto exchanges must get government licenses under securities law.
- Crypto assets are treated as commodities under commodities law.
- Anti-money laundering (AML) and know-your-customer (KYC) obligations for virtual asset exchanges
- Submitting reports on suspicious transactions
Because the Metaverse essentially uses crypto assets for transactions, how these regulations are implemented may determine the trajectory and rate of its development.
Thus, understanding the regulatory structure for virtual assets is critical to ensuring a robust and inclusive virtual economy.
Tax Law
The leaders of G20 economies are becoming increasingly concerned about the taxation of virtual goods and services and commercial activities in virtual worlds.
Ten years ago, it wasn’t apparent if governments had the authority to tax such transactions. To remedy this, norms and standards must be developed to avoid double taxation and overburdening individual users.
Equally vital is to avoid viewing the Metaverse as a tax haven where Cryptocurrencies are used to evade taxes.
In any case, with forecasts that the Metaverse could be worth trillions of dollars, we must devise effective taxation methods.
These taxes, in turn, can either increase the value of the actual economy or be reinvested in the Metaverse to benefit the virtual society.
Gambling Regulation
The US government’s ban on gambling in Second Life significantly reduced its user base and harmed its reputation.
Despite this temporary setback, Second Life attracts around 200,000 daily active users from 200 jurisdictions.
This emphasizes the importance of appropriate rules in this sector that cover both the physical and virtual effects of gambling.
Criminal Law
We can see the Metaverse from three different angles:
- It can potentially exacerbate existing cyber crimes while not facilitating the creation of new ones.
- It is a distinct society in which criminological principles apply. However, applying real-world criminology to the Metaverse would be difficult because the two realms differ significantly.
- Virtual crimes have the potential to have real-world consequences. While this is possible, it appears to be a stretch.
Potential criminal activities in the Metaverse include stalking, violence, child pornography, intellectual property law violations, and financial fraud.
It is difficult to determine whether these crimes are novel or similar to real-world crimes that may be evaluated using criminology.
So, a realistic compromise would be for law enforcement to follow established protocols while being open-minded about the Metaverse’s particular threats.
Governance and Ethics
The lack of administration in virtual worlds, including the Metaverse, has long been an issue.
Typically, platform providers set the rules and prioritize their interests. So, it is hardly unexpected that proposals for uniform global governance have emerged.
Ethical difficulties in the Metaverse are also complicated, encompassing identity problems, differing ethics and ideals among users, exploitation, harassment, vandalism, and even crimes.
As a result, we must address these difficulties if the Metaverse is to thrive, considering that roughly 43% of users join to learn about their true identities.
However, in the Metaverse, avatars do not always correspond to actual people. For example, 75% of male avatars were female, while 80% of female avatars were male.
This complicates legal rights and obligations, emphasizing the urgent need to build suitable Metaverse legislation.
Summary
The potential of the enterprise metaverse environment is continually expanding.
As organizations develop more scalable metaverse platforms and technologies, more accessible information for business executives, and more powerful headgear, the potential grows.
We expect to see more firms invest in the Metaverse in the coming years.
We also need to bear in mind that adherence to the regulations and legal implications of Metaverse-based enterprises is key to the growth of this new concept.