While the debate on AI regulation continues to grab media headlines and the attention of policymakers worldwide, discussions on virtual worlds have quietly continued. Regulators around the world are trying to find the right balance between introducing or updating policies to mitigate potential harms of virtual worlds while maximising the potential of these technologies for economic growth and technological leadership.
We are likely to see advancements in the technological underpinning of virtual worlds and increased content creation. This will keep policymakers focused on virtual worlds and increase the momentum around standards to move towards more open virtual worlds.
So far, industry and standards development organisations have led work on virtual worlds standardisation. However, will virtual worlds standardisation become increasingly politicised? How could this affect virtual worlds development, policy and regulation?
Policy discussions on virtual worlds have quietly continued
The excitement around technologies that will underpin the metaverse, including virtual worlds and AR/VR systems, has been quieter than expected in 2023. Although the evolution of these technologies and their level of maturity has been slower than predicted, discussions on virtual words have continued and are maturing:
An emerging commonality between the debate in the EU, UK and further afield is that interoperability and enabling common technical standards are requirements for open virtual worlds.
Standardisation is considered a vital piece of the puzzle
Standards are voluntary, but with sufficient market uptake, they can confer an advantage for ‘first-mover’ companies and governments seeking technological leadership. The EU has historically been aware of the importance of technical standardisation, increasingly so for emerging technologies. The European Commission’s latest annual Rolling Plan for ICT Standardisation 2023 saw the late addition of the metaverse and quantum - two novel technologies where standardisation is increasingly important. On top of this, the European Commission Communication next week is expected to set up a roadmap on metaverse standardisation.
In the EU, standardisation policy is increasingly used to support security and the concept of ‘open strategic autonomy’. Similarly, the EU and US have reinvigorated their approach to international standards with new strategies committing to a rules-based, market-driven approach. Although, standardisation strategies and cooperation forums, such as the EU-US Trade and Technology Council, primarily aim to support policy outcomes.
This form of international cooperation could be seen as a response to other markets showing leadership in standard setters on the international stage. Indeed, though not at the top of the list for standardisation, virtual worlds and the emerging technologies they are associated with have been identified as a priority by international competitors.
In 2020 and 2021, the Standardisation Administration of China (SAC) and the Chinese Ministry of Industry and Information Technology (MIIT) identified virtual and augmented reality as a focus area for standardisation. More recently, the MIIT’s Virtual Reality and Industry Application Integration Development Action Plan (2022-2026) aims to promote innovation and develop leading VR standards. In addition, the US took notice of China becoming the leading contributor to the ITU’s annual budget for 2022.
However, China is not alone in wanting to contribute to international standards. Other markets, including the UAE, through its Dubai Metaverse strategy, aim to develop global standards to accelerate the adoption of these technologies.
Challenges to the adoption of virtual world standards
Through consortiums such as the Metaverse Standards Forum and the initiatives under the World Economic Forum, industry is leading the way in developing standards to allow the development of an interoperable metaverse. Their work continues alongside work conducted by formal standard-setting bodies, such as the ITU and the quasi-formal Institute of Electrical and Electronics Engineers. However, such efforts are going to run into several challenges. Companies with different commercial objectives may slow down the standardisation process as they choose to focus on different priorities. For example, some companies will want to make AR/VR headsets interoperable with different operating systems to improve service access, while others will focus on the interoperability of avatars and apparel to sell their goods in more virtual worlds.
More fundamental challenges, however, stem from the perceived absence of products and services that can drive investment, monetisation and influence adoption. Perhaps in the near future, we will see more focus on the relationship between standardisations and patent regimes as a way to recoup investments.
It is worth noting that policy discussions are directly dependent on standards, as these won’t progress unless there is clarity on what services require standards and how they will be implemented. It is essential to know the nature of the services in order to define the information that will need to be shared between different systems and the need for standards. Equally, it is important to understand how services are to be implemented, as this will define the nature of the interface required by the standard.
What lies ahead for the EU
Absence of market pressures aside, the increased politicisation of standardisation may negatively affect the development of virtual worlds. The increased politicisation of standard-setting for emerging technologies could fuel greater industry participation in standardisation processes and persuade governments to allocate more funding to domestic and international bodies, thus making work more efficient and standard adoption faster. However, it is more likely that intensified geopolitical competition could slow down the adoption rate of common technical standards due to competing strategic interests and see increased involvement by governments.
The European Commission will increasingly find itself in the difficult position of ensuring standards are shaped as much by geopolitical interest as technical merit and market forces. Standards that do not reflect consumer demand will likely not be helpful to companies seeking to build virtual worlds and, in turn, the European Commission’s ambition is to build virtual worlds that respect EU fundamental values.
We could see early indications of how Europe intends to maintain this delicate balance in the Commission’s standardisation roadmap for the metaverse being prepared by the new High-Level Forum on European Standardisation and DG CNECT. The European Parliament committee's reports on virtual worlds may also discuss the importance of standardisation for innovation, although MEPs will likely focus on addressing potential harms in virtualised environments and assessing whether current regulatory frameworks are sufficiently future-proof.
Companies developing virtual worlds should take into account how the broader political, policy and regulatory context will influence technical standardisation and engage accordingly.
Matteo Panizzardi is a Manager at Flint working on digital and trade policy. This blog post was written with input from Director Adriana Capparelli and Specialist Partner Steve Unger. To find out more about how Flint can help you engage with policymakers and standard bodies as they roll out their metaverse and broader standardisation plans contact us or find out more here.