Pre-covid, thinking for a metaverse could have been considered out of the box but nowadays where meetings, convocations, functions, classrooms, and other activities have gone online, reaching out for Metaverse can be considered a more intricate, technically complex, but seemingly fair advancement. It was not an instant development; rather, its evolution can be traced to two to three decades back. With the execution of Liquidation, Privatisation, and Globalisation, India during the 1990’s witnessed development in the realm of digitalization, and the arrival of the digital age brought in different perspectives. Meanwhile, in the year 1992, Neal Stephenson, in the Science fiction “Snow Crash” visualized what virtual reality, the next thing in line to the internet, would look like in the near future and, while writing about it, tossed the term Metaverse.1 The term Metaverse consists of the prefix Meta, which means ‘beyond’, and suffix verse which means ‘universe.’ The Metaverse is a hypothesized iteration of the internet, supporting persistent online 3-D virtual environments through conventional personal computing, as well as virtual and augmented reality headsets.2 It is an alternate world to the real world and a dream for many students, gamers, technicians, Fashionistas and various other professionals. Metaverse has been in conversations, especially after the lockdown enforced by the governments worldwide. People already have witnessed Ariana Grande performing live on Fortnite3 or buying Virtual Gucci for the Roblox Avatars,4 which takes them a step closer to this concept.

The arrival of a new era requires updated regulations to control the misuse of the latest technologies. Metaverse is an alternative digital space whose creation requires the consumption of personal data for rendering services, a large number ofsensors, and an absurd amount ofsoftware which will further lead to further complexities. With proper regulations and guidelines, Metaverse and the digital world can be put to great use, but lack of regulation at the same time can be the heart of the problem. Proper regulation for the facial data, body language, biometric data, searches, or other personal data is essential to protect the users from data breaches and fill the lacuna in the regulatory laws. If the data is not protected then the companies may grab the data and use it to deliver targeted ads and increase profitsthrough effective ad delivery. On the other hand, social media apps may use the data to reshape our thoughts to trigger our emotions, and in this way, they can control our thought processes.

This article tries to examine what India must prepare for its technological and regulatory advancementsto ensure the development of new virtual environments as Metaverse. While examining the situation and the much-needed laws, this article shall inspect and investigate the material facts and the implication of the Metaverse and further gazing out the current Indian laws governing the Metaverse and, at last, would conclude with a few suggestions.

2. Metaverse and the Legal System

There are various instances where this concept has been taken to the next level. Games’ working on Fortnite, Microsoft working on Minecraft, Facebook working on Horizon, or be it Live Maps or Magic leap, every time the work has left the world astonished. As for the consumer brands, the ‘next big thing deciding how brands will interact with customers is the Metaverse. In the Metaverse, everything will be virtual and imaginary, including the brands and branded products. The ultimate Metaverse would be a series of interoperable worlds.

The three pillars or the main aspects of Metaverse are first presence, second interoperability, and lastly, standardization.5 Presence here means a sense of embodiment or one’s presence with others in a virtual world, and interoperability means seamlessly and effortlessly traveling in the digital space and among the virtual objects. Interoperability isn’t a new concept rather, nowadays, it is common since we see avatars being used in Zoom meetings or virtual goods such as cryptocurrencies. Standardization, the final pillar, is the enabling of interoperability of platforms and services across the Metaverse.

For example, Roblox was launched in 2006 but is way ahead of its time. It is mostly like a virtual platform where users by way of creating their own game can virtually earn real money through the exchange of virtual currencies called Robux. It is now more than just a game and a significant development in the realm of Metaverse. The main step was Nike announcing its partnership and opening a virtual store called ‘Nikeland’6 in Roblox or announcement of NFL (National Football League) Store7 in the virtual space of Roblox. In 2003, Linden Lab, launched Second Life, which allowed its users to create an avatar which can do almost anything that a person does in the real world. People in Second Life can interact with each other virtually, express themselves through music and art, attend concerts, organize meetings and even open embassy. Maldives was the first country which opened a virtual embassy in Second Life.8

However, there are certain standards issued by the Central Government in order to control the data collected by the community from the users. The current Data Protection System is governed by Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011 notified under the Information Technology Act, 2000.9 The Act suggests that the organization may demonstrate compliance with the code through having documented security programs, and information security policies must contain technical, operational, and physical security measures. It prescribes international standard IS/ISO/IEC 27001 on “Information Technology Security Techniques, Information Security Management System, Requirements” that it deems compliant to its suggested standards. The Act aims to protect those data of users from being shared whose sharing was not consented to by the user. The Bureau of Indian Standards issued the IS 1742810 to provide policy assurance and to ensure that the organizations that are collecting data are assuring their customers of proper privacy practices and Data Privacy Management System. The IS 17428 has been divided into two parts, one of which is mandatory and the other suggestive. The IS 17428, has narrowed down the definition of personal information, 11 sensitive personal information12 , and consent13 in order to clarify the data type so that the organizations further process it accordingly. The standard mandates the organization to incorporate certain engineering and design requirements as to meet the requirements laid down on data accuracy, choice, consent, disclosure, portability, and security. The organization must also establish those privacy management systems to implement privacy policies, preserve obsolete policies and implement the guidelines that complement the level of detail involved. Unless they successfully demonstrate that the organization is out of the jurisdiction of the concerned sub-clause, they will be liable to meet the recommended guidelines. The concerned standards don’t particularly specify if it applies to foreign organizations in India or Indian organizations abroad; however, if the organization doesn’t comply with proper data privacy standards, the organization may be held liable to pay damages under the IT Act. The standard mandates the organizations to conduct periodic audits and allocate resources to the group which is competent in data privacy. The organizations also need to establish, document, and maintain mechanisms to reduce the risk of data breaches and protect data privacy.

In order to control standardization, the government, through its notification dated 25 February 2021, enacted The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 with the main objective to govern and protect the users from various contents that can be pernicious for them. For example, the government, through the mentioned Act, has made it an obligation for any social media platform with more than 5 million registered users to keep tools and mechanisms which can proactively identify and remove content that is detrimental to the mental health of the user. It is a step in furtherance of providing users assurance of data accuracy in light of existing and currently most extensive Information Technology Act, 2000 and IT (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011. On the one hand, the law is creating a safe, secure environment; on the other, it is stifling between freedom of speech and expression. The content which may have been removed needs to be specified under a separate category. If the segregation of content has not been done correctly, it may create a debate and be considered gross abuse of the process of law. Therefore, the presence of law is great guidance for the universe of Metaverse; however, there still remain some problems whose solution is much needed to carry on this digital era to the next level.

3. Problems in the Metaverse Environment

Article 19 of the Indian Constitution guarantees every citizen Right to freedom of speech and expression; however, it is the same article that provides certain reasonable restrictions that can be considered to curtail the right. The law has given the power to organizations to prohibit spreading fake news, speech against public policy, morality, decency, and security of the state. Now it is up to the moral code and code of ethics of companies to decide whether the content is hateful, false, or threatening the security of the state. Section 69 of the IT Act, 2000 authorizes the Central Government and State Government with power to issue directions or interception or decryption of any information in interest in the security of the state, sovereignty, and integrity of India. The data in the Metaverse environment similarly will and should be under surveillance of the government, and if found against public policy or security of the state, it may be removed, and the organization may be penalized accordingly for the provisions under. Legal evolution for the metaverse era would entail law injecting itself into a manner that balances fundamental rights, such as the freedom of expression, with the protection of public interest.

Unfair trade practices or unfair competition in India is governed by the Competition Act, 2002.14 The above-mentioned Act enforces antitrust laws and outlaws “every contract, combination, or conspiracy in restraint of trade” and any “monopolization, attempted monopolization, or conspiracy or combination to monopolize.” However, only the restraints which are unreasonable have been prevented by the Act. Therefore, if numerous apps participate in the market and one of them unfairly dominates all or tries to establish a monopoly, it may be tried under the Competition Act, 2002. Now, suppose there have been some unfair competition issues in the Virtual World, then under what authority will it be governed? For example, we know Nike has opened a store, and there is an NFL store as well and consider that if few more stores open and there is a dispute regarding act of NikeLand establishing Monopoly or NFL involved in some unfair trade practices. What will be the law commanding trial and justice in those spaces? What should be the procedure or the penalty, and who will it be decided by?

The issue related to Intellectual Property Rights will also be a considerable issue to wipe off. As we know, the Metaverse will consist of proprietary Digital spaces, and in those digital spaces, there will be Intellectual property of various brands, people, etc. Those Intellectual properties need to be protected. Suppose there is a digital space; now, various brands will open their virtual stores to sell virtual accessories, as was seen in the case of Nike opening NikeLand or opening of NFL store or performance of Ariana Grande. Here forth, the question arises as to how licensing, trademark, copyright issues for those will be dealt? Secondly, people, in those digital spaces, will create their homes, their own infrastructures, etc., so with whom will the right be vested, since the homes or things created will not entirely be of the user as the programming and design of the developer was also involved with the creation? Also, if the right will be vested on both the developer as well as the user, another question that arises is, what will be the ratio, and under what authority will it be governed?

Now, suppose the Metaverse is being used by people of different origin, different nation and at different places. In that case, the question arises that laws of which nation shall govern the digital space and the metaverse environment? The stance on this question is still very unclear, and there is no direct answer to it. The amalgamation and development of laws is the only practical answer. The laws need to evolve with changing dynamics and accordingly need to incorporate various clauses to deal with the new situational problems and give the world a proper solution accordingly.

4. Probable Steps

Intellectual Property Licensing agreements are going to be a critical factor in driving the rights in the world of Metaverse. The absence of IP Licensing agreements may result in chaos. Any brand or product that exists in the Metaverse universe shall have its IP license, and in case of dispute, the same shall be used. If supposedly any brand has created a T-shirt for a particular game in the Metaverse, and if it wants to use its T-shirt elsewhere, it will have to take proper IP rights that are necessary and require IP Licensing Agreements for the same. Also, in a case where a Metaverse vendor wants to create content with a brand, the absence of combined IP rights may result in a situation where the rights are given to the vendor for a particular digital product, but leverage is taken from the vendor for future use. The basic use of a trademark to protect unauthorized use and obtaining rights may not be sufficient in all situations. For example, if a company ‘X’ has its Jackets in the Metaverse for sale, however, it doesn’t want to show its Jackets where violence against females is depicted. In such a case, since brand ‘X’ will want to escape unwanted brand associations, it will limit its use at the outset to prevent disputes down the lane. This will be reflected in the terms of service and end-user agreement and ensure what can be done with the jackets and what can not. This way, if the brand has complete IP rights over the property, it may limit and control the use of its products. These will also be helpful in censoring for the bad, and the primary line of distinction between acceptable and unacceptable will be created in the Metaverse Universe.

The creation of counterfeit digital goods which resemble goods of various brands may also be an issue in the Metaverse. User-Generated content in this scenario will not only be ubiquitous but essential for the growth of Metaverse. In such instances, protecting their creation with proper IP rights will be a top priority for the brands. Further, embedded perks and signifiers for authentic items may be a discouraging act for those infringing user-generated content. These extras may also grant potential utility to the goods; however, it will work only in cases of the same platform. If the protection is desired across all platforms, Non-Fungible Tokens would be suggested.

What NFT’s do is that, when product is purchased, parties are instructed on the do’s and do not’s of the product. Now Tokenizing the product will further show the instructions related to the product during the entire life cycle of the product. This way, if the product is even taken beyond one platform of Metaverse, the instructions and the embedded IP Rights regarding the concerned product will still tag along. This will create strict directions regarding a product and assurance of originality for their entire lifetime.

While some ideas of Metaverse can’t delve into reality yet, Metaverse is not completely fictional, and work is being done upon the realm to bring it into its complete existence. We witness Virtual Reality, which lets us drown in the virtual world, Augmented Reality, which pulls the internet from our Physical World, meanwhile virtual products have refined the fiduciary relationship for us. The law needs to strengthen itself to govern the codes on which the Metaverse will be based. The law will soon wholly prevail over the principles upon which Metaverse will be based. The most ensuring and effective way of governing the behavior in Metaverse through regulations is by ensuring that the elements and components of mixed reality certainly meet mandatory standards that shall be agreed mutually. Adapting the code of Metaverse may, however, remain a challenge for the developers since they will be under pressure to develop new products with various advancements but under certain restrictions.