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Meta and Microsoft Can't Self-Regulate Their Metaverses, UK Regulator Warns

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  • Ofcom Chief Executive Melanie Dawes said self-regulation of the metaverse, a hypothetical digital world touted by Meta and others, wouldn't fly under U.K. online safety laws.
  • The U.K. is "in good stead" to regulate the technology, she said, adding incoming online safety laws are strong enough to tackle metaverse platforms and companies.
  • There "are some differences" with the metaverse compared to "traditional" social media, Dawes noted, including the immersive nature of VR services.

The boss of the U.K. media regulator Ofcom warned "metaverse" forays from tech giants like Meta and Microsoft will be subjected to incoming rules forcing platforms to protect users from online harms.

Speaking at an event in London hosted by policy consulting group Global Counsel on Tuesday, Ofcom Chief Executive Melanie Dawes said self-regulation of the metaverse, a hypothetical digital world touted by Meta and others, wouldn't fly under U.K. online safety laws.

"I'm not sure I really see that 'self-regulatory phase,' to be honest, existing from a U.K. perspective," Dawes said. "If you've got young people in an environment where there's user-generated content according to the scope of the bill then that will already be caught by the Online Safety Bill."

The Online Safety Bill is a set of legislation that seeks to curb harmful content from being widely shared on the internet. The rules would impose a duty of care on firms requiring them to have robust and proportionate measures to deal with harmful materials such as vaccine disinformation or posts promoting self-harm.

Violations of the law — once it is approved — could lead to fines of up to 10% of annual global revenues. Down the track, senior tech executives may also face criminal liability for more extreme breaches.

The bill is especially concerned with the protection of children, having been developed in response to the death of Molly Russell, a U.K. teen who took her own life after being exposed to suicide-related posts on Instagram. In September, a coroner investigating Russell's death made the landmark conclusion that "negative effects" of social media contributed to her death.

Dawes made clear that the metaverse wouldn't be legally immune to the new rules. The U.K. is "in good stead" to regulate the metaverse, she said, adding the scope of the Online Safety Bill is wide enough to accommodate platforms and companies that play a role in the metaverse. "We can pull it off."

Dawes said it has been easier for "horrific" illegal activities to have a larger impact through the internet. She cited the May 2022 live streaming of the Buffalo, New York shootings on Twitch. In a recent report, Ofcom recommended platforms take measures to limit access to live streaming, including age verification.

There "are some differences" with the metaverse compared to "traditional" social media, Dawes noted, including the immersive nature of VR services and the difficulty in determining what a child is experiencing once they've got a headset on.

"You do need moderation to make sure that you manage these things because they've happened at such scale," Dawes said. "I think that things like metaverses are adding intensity into that mix."

What is the metaverse?

The metaverse is a term that's proven difficult to define. It loosely refers to the idea of virtual worlds in which thousands, or even millions of people, can congregate in vast, 3D worlds. It is often associated with technologies like virtual and augmented reality.

Consumers are largely in the dark about the metaverse, with awareness of the technology lower than of other technologies like VR, artificial intelligence and cryptocurrencies, according to research from Global Counsel presented Monday. Only four in 10 people in the U.K. know much about the technology beyond its name, a survey by the organization found.

Brits are much more skeptical about the metaverse than their French and U.S. counterparts, according to Global Counsel. Attitudes to the technology are mostly negative, with the research finding a net favorability score of minus 3% in the U.K. In France and the U.S., consumers were more favorable toward the metaverse, Global Counsel said.

Meta, formerly Facebook, is betting heavily on its vision of a metaverse in which users can interact socially or even work in. The company this week released its new Meta Quest Pro headset, which retails at $1,500 and makes some improvements on its predecessor, the Meta Quest 2. Such investments are weighing heavily on the company's bottom line, though, contributing to a $15 billion loss since the start of last year.

Microsoft is similarly investing aggressively to achieve its own metaverse creation with its augmented reality HoloLens headsets and proposed a $69 billion acquisition of Activision Blizzard, the video game maker behind Call of Duty.

In gaming, in particular, regulation will need to be more "active" to make sure safety is baked in from the start, Dawes said, adding video games are "particularly attractive to kids."

The Online Safety Bill had been stalled following the resignation of former Prime Minister Boris Johnson and the subsequent appointment of Liz Truss as U.K. leader. After Truss' short tenure recently came to an end, regulators are hopeful the bill will soon advance through Parliament under new PM Rishi Sunak.

Sunak's choice of digital minister, Michelle Donelan, had committed to strengthening the law's child protection aspects under Truss.

In its current form, the bill is highly controversial. The wording of the bill, targeting content that is "legal but harmful," has provoked outcry from some digital rights activists, who fear it may be too restrictive of free expression online.

"The idea that platforms can opt people out of such things is nonsense," Jim Killock, executive director of the Open Rights Group, an organization that campaigns for internet freedoms, told CNBC.

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