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Spilling the Beans on Disputes in the Metaverse

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Given the multi-faceted nature of the Metaverse, the disputes that could arise are limitless. It is therefore important that dispute resolution mechanisms that will be used in dealing with Metaverse-related disputes are agile enough to account for a new legal environment.

The term Metaverse was first coined in a novel called “Snow Crash” by Neal Stephenson, published in 1992. It described a dystopian future world from which people escaped into an alternative 3D, connected reality.


More than thirty years later, we have already experienced the integration of the Metaverse into different aspects of our everyday lives, such as:

Qatar hosted the first EA Sports FIFA Metaverse tournament in 2022, where viewers received free non-fungible tokens (NFTs) exchangeable for merchandise and player interactions.

In 2022, Nike introduced “Nikeland”, a virtual environment where users can try on virtual products with their avatars and take part in mini-games. They can visit Nike’s digital showroom, buy any garment and even create their own Nike-branded accessories from scratch.

More than 60 brands (such as Balenciaga, Tommy Hilfiger, Adidas, and DKNY) participated in Decentraland’s second Metaverse Fashion Week from 28-31 March 2023, which allowed visitors to virtually participate in runway shows, panel talks, shopping experiences, and ‘after-parties’.

The Metaverse market is expected to reach USD 758 billion by 2026 (See “The Metaverse and International Arbitration – How to Anticipate and Resolve Web 3.0 Disputes”, Global, Switzerland, 4 March 2022). As it grows, so will new and complex legal issues.
How will legal disputes evolve as a result of the rise of the Metaverse?

Types of Metaverse Disputes

To understand the disputes which may arise, we must consider the fundamental building blocks of the Metaverse. The Metaverse can broadly be divided into:

Infrastructure:

the “roads” and “bridges” that enable users to connect to the Metaverse platform ie. the hardware and technologies underpinning the Metaverse and the way users access it;

Platforms:

the software and tools determining how users will access and continue to build the Metaverse;

Content:

the immersive experiences and applications that allow people to interact and participate in activities on the Metaverse; and

Governance:

the rules and regulations of the Metaverse (including its accessible content).
Given the multi-faceted nature of the Metaverse, the disputes that could arise are limitless. Metaverse disputes can stem from currency and crypto investment, virtual items or assets, virtual real estate, data, policies, rules and governance systems.

 

By Karl Blom, Partner, Anél De Meyer, Senior Associate & Brittany Leroni, Associate from Webber Wentzel

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