Joonas Mikkilä

Europe and the metaverse – 8 guidelines for the EU’s approach to the virtual worlds

Joonas Mikkilä

Hype cycles come and go. The past few months have seen a meteoric rise of generative artificial intelligence systems. While everyone is raving about ChatGPT, one might wonder what ever happened to the metaverse?  

The European Commission, for its part, has not chosen to disregard virtual worlds. It is still slated to release its non-legislative initiative on the topic later this year, and is currently gathering evidence from stakeholders for the proposal.    

Why ought the EU's approach to metaverse concern technology industries?

What should the EU’s approach to the metaverse be and why ought it concern technology industries in Finland and other Member States? 

Virtual worlds, otherwise known as metaverses, are a fast-growing frontier of the digital space, consisting of a wide variety of immersive environments. They touch many different areas of economy from consumers to companies, offering novel ways to access and offer services, for example games and social networking, as well as to design and innovate material objects, such as equipment and factories.  

In the field of manufacturing industry, a related and noteworthy development is the creation of digital twins for connected machines and production lines. Once deployed, these virtual doubles will improve energy and material efficiency, and enhance remote diagnostics and maintenance. This enables both a significant increase in productivity and a decrease in environmental footprint.      

In parallel with the development of purely virtual worlds, it can be foreseen that the virtual and physical realms will also merge into an extended reality where everyday surroundings will be augmented with a layer of digital projections. For manufacturing companies and their networks of suppliers and customers, this will make the industrial Internet of Things (IoT) more modifiable and accessible. 

 The EU must foster the development of shared soft infrastructure.

Virtual and mixed realities will open new interfaces to the internet and become platforms for people, businesses, and public authorities to interact. To maximize the benefits of these digital interfaces and platforms and to avoid the undesirable consequences of market concentration and lack of compatibility, the EU must foster the development of shared soft infrastructure. This includes harmonised rules and standards that underpin virtual environments and ensure their interoperability, contestability, openness, and security in the Single Market and beyond.  

At the same time, for European companies to invest in the skills and knowledge needed to make the successful shift to virtual and augmented environments, the EU must focus its efforts on creating incentives, be it through R&D support or innovation-friendly regulation.    

With this in mind, we recommend the following guidelines for the EU’s policy approach to the virtual and digitally augmented worlds: 

  1. Collaborate closely between European policymakers and stakeholders, including industry, when planning initiatives, legislative or other, on virtual and augmented worlds.  
  2. Develop harmonised rules, protocols, and standards with like-minded international partners and organisations such as the International Organization for Standardization (ISO) and the OECD to ensure the interoperability and contestability of virtual worlds in the EU and beyond. 
  3. Foster an open and competitive environment that encourages innovation, entrepreneurship, and competition by requiring interoperability and portability of data and assets in virtual worlds, as a rule, while also ensuring fair and non-discriminatory access to the underlying technologies and platforms. 
  4. Support research, development, and deployment of virtual and augmented reality technologies, including with a view to industrial use-cases, through EU programs such as Horizon Europe and Digital Europe.   
  5. Implement the existing EU regulatory framework of the digital space, especially the Digital Markets and Digital Services Acts, in a flexible and adaptive fashion to adjust to the fast pace of technological changes in virtual reality platforms and related services.   
  6. Produce soft law instruments such as recommendations, guidelines, codes of conduct and model contractual terms, to promote the market-driven uptake of common industry practices around virtual worlds.  
  7. Resort to new regulation only when there is a significant risk of fragmentation of rules in the Single Market for virtual world products and services.  
  8. Before introducing new regulation on virtual worlds, use dynamic and collaborative ex ante impact assessment mechanisms (such as regulatory sandboxes) to ensure the proposed legislation is fit for purpose, innovation-friendly, risk-based, and future-proof.      

For further information:
Joonas Mikkilä, Senior Advisor, Technology Industries of Finland,