Metalaw: crime and conduct in the metaverse

On 9 February 2022, Philip Rosedale, founder of Second Life, argued that the metaverse should be locally legislated in much the same way as the physical world. Leading scholars and stakeholders were already exploring the concept of a “metalaw” governing future virtual worlds as a necessary part of managing the evolving space.

On its surface, metalaw appears to conflict with the ethos of a Web3 future, in which rules and governing bodies sit uneasily within an inherently decentralised system. This series considers the implications, ethical dilemmas and opportunities involved in integrating legal systems into the metaverse. This first article examines player conduct and the concept of crime in virtual worlds, and suggests sandboxing certain forms of conduct within designated spaces.

User action and cybercrime

The introduction of Meta’s virtual platforms and the rise of virtual coworking spaces have rapidly broken down some of the “fantasy” associated with the metaverse. Remote work, educational opportunities and events in digital environments have shifted the cyberpunk-esque picture often imagined when considering this new frontier. At this point, the metaverse appears at least as important for its practical capacity to help people work, learn and collaborate as it does for fantasy.

Social standards will naturally be imported into these systems. Courtesy, respect and freedom of expression are important values to embed as the metaverse develops. Although managing user conduct in a supposedly limitless world may seem contrary to the spirit of an open metaverse, troubling behaviour had already emerged.

Some misconduct will involve familiar cybercrimes, including data and privacy breaches. It is also important to consider the growth of user-on-user harm in immersive environments. A woman reported being groped in Meta’s virtual-reality platform, an incident a Meta representative described as “absolutely unfortunate”. Concerns also arise around bullying and harassment, particularly in virtual classrooms. Theft takes new forms as well: phishing attacks targeting NFT marketplaces can resemble the digital equivalent of an art heist.

Such conduct is difficult to police, and it is even harder to determine who should do the policing. Rosedale criticised business models built around advertising, surveillance and behavioural targeting, describing them as highly problematic.

Sandboxing

Games such as Grand Theft Auto make crime and chaos part of their objectives. It is difficult to imagine that model integrating comfortably with the Seoul Metropolitan Government’s five-year plan for Metaverse Seoul, which contemplated virtual services spanning the economy, culture, tourism, education and civic administration.

Should a participant in a virtual boardroom be able to harm another user’s avatar? It seems doubtful that such functionality should be permitted. In the same vein, however, does sandboxing conduct according to a user’s location in the metaverse improperly restrict virtual freedom of movement?

Freedom of expression raises similar questions. Cultural appropriation, for example, becomes difficult to navigate when services such as VRChat offer users an enormous range of avatars. Australian laws permitting courts to identify people behind anonymous online accounts may also become relevant to harassment and cyberbullying in virtual environments.

Accessibility and open innovation are guiding principles for the metaverse. Without a fixed identity for the technology, encouraging freedom remains important. A lawless “Wild West”, however, is unlikely to support a smooth transition into this new frontier.

Conclusion

Metalaw is no simple answer to digital misconduct. Few, if any, direct precedents existed in 2022 for treating harmful conduct against an avatar as a distinct crime. Conflict of laws was already a persistent problem for Web2 cybercrime, and the lines became still more blurred around cryptoassets and money laundering. Internet companies will generally be subject to laws connected to where they operate and where their users reside, but immersive and decentralised systems make those connections harder to apply.

That prompts a larger question: do we need a “metacourt”? Whatever the answer, embedding ethical and safety standards will be a key task for the stakeholders building this infrastructure.

The next part in this series will consider financial laws and taxation in the metaverse, particularly property taxation in Decentraland.