Published on 21 August 2022
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Children, competition and the metaverse

The digital world of new concepts is fast evolving. Sam Gilbert shares insight into some of the latest concerns relating to child protection, competition intervention, and the metaverse for policymakers to be aware of and address.

There is still a lot of confusion and disagreement about what “the metaverse” means – but the policy challenges it presents are coming into focus.  While the potential benefits of virtual reality (VR) for remote work, education, and entertainment have been explored in countless comment pieces, researchers have begun thinking through the risks.

The philosopher of technology ethics, Luciano Floridi, points to three: the widening of the digital divide due to unequal access to VR hardware and 5G; addiction to immersive VR experiences; and the creation of new forms of online harm. The consultancy Public is particularly concerned that “metaversal” games will expose children to a wider range of such harms.

Video gaming has a relatively low media profile and an audience that skews young. Consequently, it is easy for policymakers to overlook the scale it has already achieved. Roblox, a platform which allows users to programme and play online games, is perhaps the most important example of a “proto-metaverse”. In the United Kingdom, there are already 9.4 million active Roblox players. In its biggest market, the United States, a staggering 75 per cent of children aged 9 to 12 regularly use the platform.

While a recent large-scale study by researchers at the Oxford Internet Institute has shown that playing video games has no effect on well-being, Roblox exposes children to risks of harm in different ways. Many Roblox games played by children are developed by virtual teams of other children. Increasingly, these teams resemble professional video game studios, with projects coordinated by managers through third-party platforms like Discord. Investigative reporting by People Make Games suggests that Roblox Corporation largely disowns responsibility for upholding the labour rights of child developers and protecting them from economic exploitation and abuse by managers.

The same research finds that parts of Roblox’s Avatar Shop – the marketplace in which virtual goods are traded – effectively encourage children to speculate in volatile crypto assets. Although trading takes place in the platform’s native token, “Robux”, it is fungible with fiat currency, meaning real money is at stake. As with NFT (non fungible token) marketplaces, no assessment of a user’s means, financial sophistication, or risk appetite is undertaken before they can buy digital collectibles – let alone one that is tailored to children. Roblox has endorsed the Five Country Ministerial’s principles to counter online child sexual exploitation, but these do not encompass children’s rights as workers or consumers.

Meanwhile, the European Parliamentary Research Service (EPRS) and European Competition Commissioner Margrethe Vestager are concerned that the metaverse will become dominated by the big tech companies who have announced investments in the space – notably Meta (formerly known as Facebook) and Microsoft.   

It is the threat of monopoly that emerges as the key policy issue from a new book by the venture capital investor Matthew Ball, The Metaverse: And How it Will Revolutionize Everything.Mark Zuckerberg is chiefly responsible for propelling the metaverse into public consciousness, and it has been Meta  which has drawn the most attention from regulators – witness the Federal Trade Commission’s (FTC) suit to block its acquisition of VR fitness app developer Within, on the grounds that it would “expand [Meta’s] virtual reality empire”. But Ball’s analysis suggests policymakers should be much more concerned by Apple.

The main reason is that – unlike Meta – Apple is a vertically-integrated provider of hardware, operating systems, platforms, and applications. Currently, its control of the App Store means it sits between app developers and users – a “gatekeeper” position enabling it to extract rents of up to 30 per cent, which totalled $73 billion in 2020. Apple would therefore much prefer a set of siloed virtual worlds, connected by the App Store, to an interoperable metaverse built on open standards. At the same time, it has quietly been filing VR patents and making VR acquisitions, including headset manufacturer Vrvana, content producers NextVR and Spaces, and facial recognition and expression-tracking software developers Emotient, RealFace, and Faceshift. This ought to heighten the concern the Competition and Markets Authority (CMA) has already expressed about Apple’s control of mobile ecosystems.

Ball also suggests that the evolution of the web towards the metaverse will engender a new generation of  big tech companies, which may be less familiar to policymakers than today’s incumbents. Roblox is not the only contender: around half of all video games run on Unity’s eponymous gaming engine. In addition to developing hugely popular online games like Fortnite, Epic Games owns the engine Unreal, which powers an estimated 15 to 25 per cent of 3D immersive worlds. As well as making the high-end graphics processing units (GPUs) which are needed for “metaversal” experiences, Nvidia operates a 3D software platform and the world’s second most popular game streaming service (after Microsoft Xbox). All four are arguably better positioned to achieve dominance than Meta – or indeed Alphabet (Google).  

A fully-fledged metaverse is probably decades away – but additional child protection and competition interventions in the video gaming market may be needed much sooner.

Authors

Sam Gilbert

Sam Gilbert

Affiliated Researcher

Biography Sam is an entrepreneur and researcher working at the intersection of politics and technology. An expert in data-driven marketing, Sam was Employee No.1 and Chief Marketing Officer at Bought...

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