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Metaverse and its legality: where does India stand?


The most important facilitator of usefulness in contemporary human civilization is technology. Cutting-edge technology through Augmented Reality (AR) and Virtual Reality (VR) in internet forums, is being introduced and advanced to increase the areas where our social and digital lives intersect, such as socializing, prosperity and productivity. They aim to enrich a person’s sensory experience by using technology to depict reality. While the latter bases the experience on an altogether distinct setting, the former enriches existing features with deeper layers of significance.  Although previously divisive problems like Antitrust, intellectual property rights (IPR), and data privacy are raised by the pursuit of this futuristic technological frontier, they must be adequately addressed to realise the promise of the technology. Submergence in a virtual world environment would include real-time action, augmentation, automation, decentralisation, mobilisation, and autonomy as some of the primary Metaverse features. To combine separate virtual reality experiences, commercial and open-source software, as well as visual, audio, and haptic technologies, are employed by several organisations that work in unison. This combination is projected to result in unique kinds of participation and content in developing digital environments, production, commercialization and sociability.  As a consequence of information technology, common people have begun to spend a lot on digital assets to ease their transition into this virtual world behemoths like the desire to create the metaverse shared by Meta, Google, and Microsoft. This makes it necessary for all national governments to consider and prepare for the potential future effects of virtual worlds. This parallel digital realm needs the utilisation of exceedingly sensitive information for effective service delivery, as well as various software and sensors, and all of them make managing these platforms more difficult. Therefore, it’s necessary to keep track of recognition data, biometric data, search data, body language data, and other personal data to safeguard consumers from data breaches and close regulatory gaps. If such information is not protected, businesses may take it and use it to personalise adverts and increase revenue through efficient advertisement distribution. 


Information Technology Act of 2000, through a series of rules by the name of Information Technology Rules, 2011, oversees the current data protection system. These regulations state that a business must have policies ensuring the safety of the information that include operational, technological, and physical security measures as well as written security plans to show code compliance. In a notification dated February 25, 2021, the government released the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (IT Rules), with the primary objective of governing and ensuring the safety of the users from various potentially hazardous materials. An organisation must cohere to the exact design and technical requisites to satisfy the required calibre for data security, accuracy, portability, consent, choice, and disclosure. The organisation must also set up management processes to implement appropriate rules, privacy standards, and even suggestions necessary for deriving the volume of information needed. 

The regulation and legal concerns are: 

  • Privacy & Security Concerns
  • Applying Competition & Anti-Trust Laws
  • Infringements of IPR
  • Liability Enforcement
  • Legal Issues 


It’s conceivable that the platform of Metaverse will gather a tonne of highly sensitive personal information given the anticipated number of users. Any AR-VR device’s privacy statement will often state that it will collect data on a user’s biological characteristics, and physical environment, among other private information. This would be seen as “sensitive personal data” according to the IT Rules, due to the acquisition of such biometric information. The government may make orders allowing the interception and decryption of data necessary to “ensure the security, sovereignty, or integrity of the state,” as stated in Section 69 of the IT Act. Data in the Metaverse environment may be monitored by the government and could be retained if it is against the dictates of public policy. A corporation could be liable to pay a fine for breaking the law. Though it is yet unclear how successful this would be in practice, it is predicted that the law itself, in the period of Metaverse will effectuate an equilibrium between fundamental liberties like freedom of expression and the protection of the general welfare. 


The applicability of current laws has been contentious because of the peculiar nature of the metaverse. Since the beginning of the metaverse, anti-trust has been wrestling with existential questions. A contract, conspiracy or combination, monopolization, or an attempt towards monopolization, to obstruct trade, are all prohibited under the Competition Act of 2002, which enforces antitrust laws. Unreasonable constraints are also forbidden. So, this regulation may be applied if numerous apps compete in a market and one unfairly controls or threatens to control a significant portion of it. While the majority of anti-competitive behaviours that exist in the real world can also exist in some form in the metaverse, the basic characteristics of the metaverse and the blockchain make it hard to identify and crack down on such behaviour, allowing businesses to engage in it with impunity.

Private blockchains can be used by anti-competitive businesses to exchange commercially sensitive information, such as information about prices, among themselves. Only those who have the owner of the blockchain’s permission can access these blockchains. Authorities won’t be able to access these messages and, as a consequence, prosecute such behaviour; nevertheless, they may seek such information following the applicable laws. The current situation, where authorities may simply inspect firms’ premises to acquire evidence of such infringements, is different from this.


The virtual accessories market has grown with the advent of Metaverse; as a common individual experience is a commitment to their avatars, the expenditure on virtual fashion accessories of real money is expected to accelerate. There is a substantial increase in the charges of trademark and copyright infringement because the procedure of copying virtual goods is fairly simple. Businesses now are worried because their trademarks are being used, in addition to their physical products, in the online platform. Although the existing government regulations are insufficient to safeguard against IPR infringements, blockchain technology might provide a workaround for businesses. The information in the blockchain cannot be altered or removed because the blockchain is an unchangeable and everlasting record of information, which is why the data alteration requires a consensus process. This technology process can be employed in cases where a company has several virtual services or products available in one single Metaverse platform. These products and services are protected against their intellectual property rights by this technology. The description of the pertinent goods is attached, along with the range of pertinent rights and their own information. The legal and illegal applications for a pertinent product can be deduced from this data. Furthermore, even if the product switches between platforms, this data remains connected to it during its entire digital life. This allegedly works well to safeguard the intellectual property of a brand. 


It was evident that not one user could alter the data on a given blockchain without the consent of the other users, blockchain technology significantly increases security. Pseudonymity, or the inability to determine a user’s true identity even if their virtual identity is known, is another crucial feature of blockchain technology. Despite these potential benefits, there are also very particular and distinct issues with blockchain technology. For instance, if one virtual character bothers another, will the harasser be held accountable for their behaviour? Due to the absence of knowledge and application of law in such worlds, the enforcement of legal regulations would be challenging because the authorities would not be able to hold anybody in the Metaverse responsible for their deeds.


Given that users of Metaverse are likely to come from a variety of backgrounds, countries, and regions, it is important to consider which country’s laws would govern the virtual world and Metaverse ecosystem. In a borderless virtual environment, jurisdiction will be even more ambiguous, which is a major source of worry for many government organisations. There is still a lot of confusion around the authorities’ position on this matter, and none has been provided. The only workable approach is to collaborate and create laws together. The regulations must change in reaction to shifting dynamics, including a variety of measures to address fresh problems and provide world remedies. 


To conclude, India is yet to formulate explicit laws to regulate Metaverse appropriately, which raises the danger for its users. In this stage of Metaverse’s infancy, regulators must actively formulate effective safety measures before a higher and deeper dependence creates more complex issues. Albeit the enormous promises of “disruptive technologies” in their usage and applications, there is still scepticism over how they will affect current legal systems. It is evident that regulating new technologies would be challenging and would need a revision of current legal frameworks.

Author(s) Name: Kasturi Bhowmick (University of Calcutta)