The metaverse is expanding its horizon every passing day and now has caught the attention of European Union (EU) officials. On Thursday, Margrethe Vestager, an antitrust chief at the EU said that the metaverse could be the next target of the organization’s competition regulators.
While highlighting the competition threats associated with the metaverse, Vestager explicitly talked about the dominance of Meta at the top of the docket. The dominance of Meta according to her poses a significant threat to competition laws applicable in the jurisdiction.
The EU competition law promotes the maintenance of competition within the European Single Market by regulating anti-competitive conduct by companies to ensure that they do not create cartels and monopolies that would damage the interests of society.
Addressing the audience at a conference, Vestager said that the metaverse calls for strict vigilance to ensure healthy competition. In her words:
It’s already time for us to start asking what healthy competition would look like in the metaverse.
Additionally, the EU officer highlighted that there already is an ongoing political debate about the attention to be paid to the digital assets sector as all the jurisdictions are moving at their individual speeds. From this, she deduces that there is not going to be a single legal framework and also feels that it might prove to be beneficial. She states:
We will not get the same legal framework and maybe that is not a bad thing. Because that will allow us to hone our toolkits in the process of mutual learning.
Meta, formerly known as Facebook, has been an audacious player to grab market share in the metaverse which is still an emerging technology. The company is said to have put billions on the line to develop hardware and software.
Notably, it is the market’s leading producer of virtual reality (VR) headsets. However, the company paid a huge price for its obsession as it reported a $4.3 billion loss in the fourth quarter of last year for its metaverse division, Reality Labs. The division lost $3.3 billion in the same quarter a year ago. Todayq News reported last month that Meta’s balance sheet recorded a whopping $13.7 billion loss for its metaverse arm, Reality Labs.
While the antitrust officer highlighted the competition concerns in the metaverse, last week Yvo Volman, EU Commissioner had emphasized the need for regulations that prevent discrimination and protect user privacy in the upcoming metaverse legislation. Speaking at the DG Connect event in Brussels, Volman highlighted the importance of inclusion, equality, and user privacy protection in virtual spaces to be acknowledged in the legislation that is scheduled to be implemented in May this year.
The world has also set eyes on the EU’s Markets in Crypto Assets (MiCA) bill which was approved by the European Union in September and was voted 28 to 1 in the favor of the law by the members of the Parliament in October. The MiCA comprehensively covers aspects related to cryptocurrencies and has highlighted four primary objectives like regulation, investors’ protection, support innovation and fair competition, and financial stability. However, the MiCA has still not come into effect due to repeated technical delays precisely the translational issues.
Reportedly, MiCA also has provisions that would affect crypto influencers. One of the sections states that social media comments by crypto influencers without disclosure may result in legal consequences. Once MiCA is in effect, they will be accused of market manipulation in the EU if it is determined that they gained something from their acts.