The EU metaverse strategy: Europe’s vision of the Metaverse

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What does Europe think of the Metaverse?

After months of political speculation around possible EU initiatives on the topic of the Metaverse, the European Commission finally issued a communication in July 2023.

The new “Web 4.0 and Virtual Worlds” strategy established a European vision and highlighted the potential economic and social of virtual reality, as well as the key principles and actions to take advantage of this technological transition.

$5 trillion

The amount that could be generated by Metaverse-related consumer and enterprise use cases by 2030.

The EU estimates that the global market size for Metaverse developments could exceed €800 billion by 2030, up from €27 billion in 2022.

To support this growth, the EU wants to stay at the forefront and make EU fundamental rights and values become a reality, while putting people at the center of interoperable virtual worlds.

Introduction of New Terminology

The European Union decided to use different terminology. When the initiative was first announced, the Commission said it would focus on virtual worlds like the Metaverse. 

Various debates led to the European Commission retaining the term “Metaverse” and replacing it with the concept of virtual worlds combined with Web 4.0.

To explain this, the Commission developed two definitions. According to the European vision, virtual worlds refer to sustainable and immersive environments based on technologies such as 3D and extended reality (XR), which allow the blurring of the boundaries between the physical and digital world in real time for work, communication, learning, and entertainment. , planning and carrying out financial transactions.

But wait, what is Web4 (called Web 4.0 at the beginning of the article)? According to the strategy, this concept refers to the expected fourth generation of the World Wide Web, based on the use of advanced artificial intelligence, the Internet of Things, virtual worlds, and blockchain transactions, as well as the integration of digital and real objects and objects. environments.

If you are new to the world of cryptocurrencies, you must first understand the third generation. To learn more, we suggest you read this article: “What is Web3?

Background of Web 4.0 and the Strategy of Virtual Worlds

The policy document on virtual worlds, first announced in September 2022, has been delayed as long as possible. 

The preparatory process included the creation of a Virtual and Augmented Reality Industry Coalition and a community group where they collected the opinions of 150 randomly selected EU citizens. In July 2022, the Commission publicly published the Metaverse strategy.

It was previously stated that the policy document would have no legislative force; As a document that has no real force, it is more of a discussion or the beginning of something than a formal bill. He simply indicated that some measures would be taken in the future.

The non-legislative initiative was sent to the European Parliament and the Council. When the strategy was presented, it was noted that relevant legislation already exists in areas such as data governance, platform regulation, data privacy, and consumer protection.

Except for some side effects, there were no further mentions of potential regulatory loopholes or emerging threats.

The strategy says that the Digital Europe and Creative Europe programs will support the development of essential skills for the development of virtual world technologies and explore how these technologies can impact people’s health as part of their people-centered vision.

Mixed Reaction Instead of Praise?

If the new terminology confuses you, you are not alone. When the European Commission announced the key principles of its Web4 and virtual worlds strategy, the community reaction was mixed.

A part of the community was confused, while others joked about the development of new versions of the network.

The problem is that before the Commission announced the strategy, no one knew what Web4 was.

The terminology has also been criticized by industry experts and institutions. It was said to be disappointing that the Commission, very interested in interoperability, had failed to agree on terminology with the international community.

For example, countries such as Finland, South Korea, and Japan have launched the Metaverse strategy, while the EU aims to become a leader in virtual worlds and Web4.

The EU’s Web4 definition mentions integration between digital and real objects and environments, as well as improved interaction between people and machines. To understand what this concept means, we must look at what Europe is trying to develop.

From a European perspective, the fourth version of the Internet could look like the development of smart cities.

With the EU already investing in initiatives such as Destination Earth and Local Digital Twins for smart communities, as well as the European Ocean Digital Twin, it appears that the EU is primarily focusing on the core infrastructure of smart cities.

The connection between virtual real estate and the Metaverse was recognized long before the arrival of this strategy. If you’re wondering how this turned out, why not read this article: Metaverse and Real Estate: Should You Get into Virtual Real Estate?

The problem is that the EU decided to use a lot of buzzwords to describe a completely new term, out of nowhere.

The next technological transition must be an open, secure, reliable, and inclusive digital environment based on virtual world technologies; Using such a narrative doesn’t explain the new terminology very well, but looking at current use cases and similar initiatives can help.

The use of virtual worlds as a synonym for the Metaverse appeared in three 2022 policy documents: documents prepared by the European Parliamentary Research Service (EPRS), the US Congressional Research Center (CRC), and the OECD. The two terms were used interchangeably in these policy documents.

Although the explanation is quite ambiguous, the difference is that the European Commission sees the concept of virtual worlds as an enhanced Metaverse, covering different levels of immersion, sustainability, and synchronicity.

Analysis of Strategies in Web4 and Virtual Worlds

The European Commission’s strategy aims to further develop Metaverse to reflect EU fundamental rights and values, as well as a commitment to interoperability, openness, and immersive technologies.

The EU’s goal is to create a people-centered virtual space where European businesses can thrive in a single market.

Main Components of the European Strategy

The EU strategy is in line with the objectives of the 2030 Digital Decade and its three pillars: capabilities, businesses, and virtual public services.

The fourth component concerns infrastructure and was addressed in the Commission’s connectivity package on cloud computing and edge capacity.

Empower People and Strengthen Skills

The first component was created to provide access to secure and trusted information, create a group of virtual world experts, and provide guidelines for virtual worlds.

It recognized that creating a talent pool was important and announced close collaboration with Member States to create a pool of specialists in virtual worlds, as well as support the development of digital skills.

Virtual worlds depend on the use of potentially invasive technologies; Arguably, extensive reality technologies could pose significant risks to human rights and could lead to more aggressive collection and surveillance of sensitive data. 

The European Union has recognized the importance of managing such risks to ensure greater user acceptance and experience in an inclusive digital environment.

Thus, the first pillar includes the development of three points of progress: a talent pool for highly qualified specialists, the development of digital literacy, and the reflection of EU values for the well-being of people.

Support for Web 4.0 Ecosystem and Virtual Worlds

At the moment, no ecosystem within the EU can unite the different participants in the virtual world value chain.

To promote innovation, the Commission has stated its aim to help EU creators and media companies test new tools and bring together industry professionals and users, as well as develop regulatory sandboxes.

The strategy announced the launch of a new European partnership that will bring together stakeholders to promote innovation and create a technical roadmap for the transition.

New virtual worlds will put even greater pressure on the emergence of the communications infrastructure needed to allow these developments to occur in the first place.

The business component is based on three pillars: partnership, interoperability, and innovation.

Supporting Social Progress and Virtual Government Services

To take advantage of the opportunities offered by digital worlds, the EU supports social progress and the emergence of virtual public services. 

In addition to investing in the aforementioned initiatives such as Local Digital Twins and Destination Earth, the EU is preparing to launch a European Virtual Human Twin to support clinical decisions, as well as CitiVerse, an immersive urban environment used for city management.

The third pillar involves integrating the creation of smart cities and communities, virtual governance and experience, and monitoring systems for the development of virtual worlds.

Shaping Global Standards and Governance Issues

The policy document mentions the need to create global standards for the emergence of open and interoperable virtual worlds, ensuring that the market is not dominated by a small number of large technological players.

Although the Commission plans to engage with Internet governance stakeholders around the world and promote new standards that reflect EU values, there is little clarity on how these virtual worlds will be governed.

At the moment, we do not know whether there will be a single borderless virtual world or several divergent virtual worlds that are not connected. 

Furthermore, it is unclear what will happen when this innovation reaches a mature stage: should management be centralized or based on a decentralized structure?

According to the Commission, the EU advocates global governance of virtual worlds, ensuring fair rules to prevent large players from dominating the global market.

For now, the European Commission has only mentioned the market disruption scenario, which is based on the risk of a few large players taking on the role of gatekeepers of virtual worlds and creating barriers to entry into the market.

Is this a Race Against Big Tech Companies?

The EU wants to consolidate itself as a leader in the development of the Metaverse and the fourth generation of the Internet. 

Several proposals showed that the Commission was concerned about the possible dominance of big technology companies.

Before this strategy saw the light of day, large technology companies such as Meta Platforms, Apple, Microsoft, and Google created their versions of AI and Metaverse.

In early 2023, the head of the EU competition authority warned that violations of competition law could occur in the Metaverse. 

To level the playing field, the strategy proposes bringing together experts, media companies, and other stakeholders to create an industrial ecosystem for virtual worlds, as well as creating regulatory sandboxes to help companies test their ideas.

While the EU’s strategic plan may represent a race against the big players in the tech scene, it includes several benefits for smaller players that will allow them to join the next technological transition on equal terms.

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