EU Hints at Introduction of Metaverse Regulations and Taxes

European Commission president Ursula von der Leyen signaled the bloc is preparing the implement a regulatory framework for the metaverse, writing in her annual Letter of Intent for the State of the Union address that the Commission will in 2023 advance an “initiative on virtual worlds, such as metaverse.” The EU’s internal market commissioner, Thierry Breton, expanded on that in a blog post that Europe’s “way to foster the virtual worlds” will be threefold, focusing on “people, technologies and infrastructure,” with speculation bubbling that the third prong will involve some sort of carrier tax.

“Both Breton (at length) and von der Leyen (in passing) are clear in planting a regulatory stake in virtual ground — by pointing out that would-be metaverse monopolists will have to contend with existing EU rules, such as the recent major EU digital rule reboot,” writes TechCrunch, interpreting Breton’s blog message to mean “some of the profits made in an increasingly immersive software realm should flow to providers of the network backbone required to host these virtual spaces.”

Breton writes that “in Europe, all market players benefiting from the digital transformation should make a fair and proportionate contribution to public goods, services and infrastructures, for the benefit of all Europeans.”

“The Commission has been signaling for some months that it wants to find a way to support mobile operators to expand rollouts of next-gen cellular technologies — via imposing some kind of a levy on U.S. tech giants to help fund European network infrastructure — following heavy lobbying by local telcos,” TechCrunch reports. Last week, Breton revealed the EC “plans to consult on network infrastructure cost contribution ideas in Q1” as part of the “wider metaverse-focused initiative.”

In her letter, von der Leyen writes that in addition to “implementing the landmark agreements on the Digital Markets Act and the Digital Services Act, which saw the EU take global leadership in regulating the digital space to make it safer and more open,” the bloc “will continue looking at new digital opportunities and trends, such as the metaverse.”

“In his blog post, Breton makes it even more plain that metaverse builders are already subject to EU rules,” writes TechCrunch, but that does not mean more regulations aren’t coming. “With the DSA and DMA, Europe has now strong and future-proof regulatory tools for the digital space,” Breton writes. “We have also learned a lesson from this work: We will not witness a new Wild West or new private monopolies. We intend to shape from the outset the development of truly safe and thriving metaverses.”

Along those lines, Meta Platforms announced last week that it is “launching a new campaign in Europe to showcase the potential social and economic impact of the metaverse.” The company unveiled a white paper indicating “that if adoption of the metaverse in Europe were to grow similarly to mobile technology, it could be associated with a $440 billion contribution to the regional GDP after a decade.”