Metaverse requires regulatory scrutiny, EU competition chief says, and other metaverse stories you need to read this week

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author:  Cathy Li, Head, Shaping the Future of Media, Entertainment & Sport; Member of the ExCom, World Economic Forum

• This regular roundup brings you a selection of the latest news and updates on the development of the metaverse.
• Top metaverse stories this month: EU says metaverse requires competition checks; PwC sees metaverse redefining business landscape; Meta cuts headset prices to boost demand.

1. Metaverse requires competition checks, EU antitrust chief says

The metaverse needs regulatory scrutiny to ensure unfair competition does not go unchecked, according to EU antitrust chief Margrethe Vestager, who says it is “time for us to start asking what healthy competition would look like” in the virtual space.

The metaverse has come into sharper focus since Facebook changed its name to Meta Platforms in 2021, to reflect its bet on the new sector becoming the successor to the mobile internet. That move has in turn triggered concerns about Meta’s possible dominance of the area.

Regulatory scrutiny of digital markets has been escalating worldwide in the last three years, Vestager says, adding that “there’s a much wider political debate that digital markets need careful attention”.

Bloomberg says that EU officials have already started to look into how AI tools such as ChatGPT are changing the landscape when it comes to regulating digital spaces.

Platform – Do not Edit

How is the World Economic Forum contributing to the metaverse?

The World Economic Forum explores the potential of the metaverse in several ways, with key focuses on governance and value creation and the development of its own metaverse, the Global Collaboration Village.

Our Defining and Building the Metaverse Initiative seeks to guide the development of a safe, interoperable and economically viable metaverse, by uniting stakeholders from various sectors, including government, academia, business, and civil society.

It does so via two interrelated tracks: metaverse governance and value creation. Both tracks take an ethical, forward-thinking approach and work collaboratively to balance governance with economic and social opportunities.

Explore our Defining and Building the Metaverse Initiative.

The Global Collaboration Village is the first global, purpose-driven metaverse platform. Pioneered by the Forum, and in partnership with Microsoft and Accenture, it seeks to enhance more sustained public-private cooperation and spur action to drive impact at scale.

Inclusive and responsible by design, the Global Collaboration Village is a creative place to imagine alternative futures, explore ideas and systems transparently and safely, and envision what the future of engaging multistakeholder collaboration could be.

Learn more about the Global Collaboration Village

“We need to anticipate and plan for change, because it is an obvious fact that our enforcement, our legislative processes, they will always be slower than market developments,” Vestager told a conference in Brussels. “Sometimes we should allow ourselves to be bold, in order to be sure that we are up to the challenge.”

Microsoft is reportedly close to receiving EU antitrust approval for its $69 billion acquisition of video game developer Activision, after offering licensing deals for rivals. Microsoft is looking to take on Tencent and Sony in the gaming market, which is expected to be a major attraction in the metaverse.

2. What businesses need to know about the metaverse in 2023, according to PwC

The metaverse is not “fully ready for prime time” yet, but it is already capable of generating real business value. That’s the summary from professional services firm PwC’s list of six metaverse predictions for 2023.

Its top prediction is that businesses’ applications will be the leading force in the metaverse this year. This is based on the fact that more companies are experimenting with digital versions of physical spaces to help them refine real-life customer experiences – from retailers and restaurants testing out store and table configurations, to manufacturers building out digital twins.

PwC says the metaverse will redefine the agenda of every business leader – 82% expect the metaverse to be part of their plans in the next three years – and create a scramble for new skills, particularly for 3D artists and designers.

Other predictions include that AI could be transformational for the metaverse, as it could make it easier to create immersive experiences and extract insights from vast amounts of data and simulations, including tracking the activity of avatars.

3. News in brief: Top metaverse stories this week

Meta has cut prices for its virtual reality headsets by as much as a third in the hope of stimulating demand. The company cited lower sales of the Quest 2 headset as the reason behind a 17% drop in fourth-quarter revenue at its Reality Labs unit. Tencent is reportedly in talks with Meta to distribute its Meta Quest headsets in China, according to Reuters.

The Vienna University of Economics and Business is offering a postgraduate course that can be completed in the metaverse, The Financial Times reports. It has developed the Professional Master in Sustainability, Entrepreneurship and Technology programme with edtech start-up Tomorrow University of Applied Sciences. An increasing number of business schools are entering the metaverse, as we highlighted in our metaverse roundup late last year.

Military training is taking place in the metaverse, according to a report in UK newspaper The Daily Telegraph. It says that British company BAE Systems has run conflict scenarios where most roles are played by computers, reducing the cost of multi-million-pound training exercises. The worldwide market for military metaverse technology could be worth up to $20 billion by 2030, the newspaper says.

A virtual pop group that has already amassed over 20 million video views on YouTube is a sign of how the metaverse could change the entertainment industry. South Korean girl quartet MAVE: has been created by web designers and artificial intelligence. The band is part of a metaverse push by tech giant Kakao, which is trying to buy South Korean K-pop pioneer SM Entertainment. Kakao has invested around $9 billion in a Metaverse Entertainment subsidiary.

The metaverse real estate market is expected to grow by $5.37 billion by 2026, The New York Times reports. It says that much of this is being driven by global brands such as Adidas, Atari and Warner Music Group, who have purchased plots to sell goods or offer virtual entertainment venues. Land sales in The Sandbox, which is one of the most popular metaverse platforms, reached around $167 million last year.

The world’s biggest fashion brands are experimenting in the metaverse as they try to attract younger consumers, according to a report in The Financial Times. Gucci, Burberry, Prada and Balenciaga are among those involved. They are trying out everything from using augmented reality to allow users to try on 3D versions of clothing before buying the real thing, and offering NFT owners the chance to buy customized jewellery.

A metaverse-based shopping mall has been opened by Middle East lifestyle and leisure conglomerate Majid al Futtaim. The Mall of the Metaverse is based in the Decentraland platform and will offer “increased digital experiences across retail, entertainment and leisure offerings”. The firm says this will allow it to better monitor and understand shopper behaviour – but points out that there needs to be transparent governance standards on data to ensure that consumers trust brands operating in the metaverse.

4. More on the metaverse on Agenda

The metaverse can be divided into three main areas – consumer, enterprise and industrial. What is the difference between each one, and how are they developing?

Without a deep understanding of the cultures and dynamics at play in the metaverse, we risk losing our ethical bearings, two experts say. They suggest embracing new fields of social sciences such as digital anthropology to ensure we understand the potential human impact of the metaverse.

Colombia has held a court hearing in the metaverse. Technology is making it easier and faster for people to access the justice system, according to the magistrate in charge.