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Global: EU Competition Officials Say Regulatory Tools Can Be Used in Metaverse

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Will metaverse markets be ones in which consumers and businesses can participate freely or ones in which dominant platforms and companies can control access and activities?

That’s likely to be a challenge for regulators, as the metaverse may be the next frontier for not only the companies that are building it, but also for organizations that enforce competition laws, according to two members of the Directorate-General for Competition (DG COMPLETE ) at the European Commission.

“Economic activity is subject to competition law regardless of whether it happens offline or online — even when it happens in a virtual world,” Friedrich Wenzel Bulst and Sophie De Vinck wrote in an article posted on the website of the European American Chamber of Commerce (EACC).

Sources of revenue in the metaverse are likely to include headsets and other hardware, financial transaction mechanisms, eCommerce, advertising, marketing and data monetization, they wrote.

If metaverse platforms become closed mechanisms or businesses can limit competitors’ access to them, both consumers and businesses may be constrained by requirements that they use certain hardware or software, pay exorbitant prices for access or use only certain providers’ services, Bulst and De Vinck wrote.

“These potential competition challenges are not new — many have already been observed in other digital markets and ecosystems,” Bulst and De Vinck wrote.

To prevent those problems from happening in the metaverse, authorities must be ready to take action. European Union regulators, for example, already have tools they can deploy to protect competition, privacy, intellectual property and freedom of expression, the authors wrote.

“Successfully applying these competition rules to the metaverse will contribute to ensuring that existing and emerging markets — whatever their final shape or form — function well for businesses and consumers alike,” Bulst and De Vinck wrote.

Among the tools mentioned in the article are the Digital Markets Act and the Digital Services Act that were recently passed by the EU.

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