Competition in The Virtual World

Please join us for a discussion on antitrust considerations in the metaverse—including recent commentary from antitrust regulators across the world—and potential impacts of proposed antitrust legislation on metaverse platforms.

Key Takeaways

Developing Antitrust Regulations in the United States, United Kingdom, and European Union

Numerous jurisdictions are considering legislation and updated regulatory guidelines that are focused on competition in the digital space. While the metaverse has certainly been a hot topic in tech and gaming, regulators are still wrapping their heads around what it is and what competition looks like in this arena.

United States

• Since Congress’s 2020 report on its investigation of competition in digital markets, several antitrust reform bills have been introduced aimed at increasing interoperability between technology platforms to support openness, lower barriers to entry, and support network effects.
• While specific bills do not contain the term “metaverse” they may influence how the metaverse develops and the types of antitrust issues that may emerge. 
• Both the US Federal Trade Commission and the US Department of Justice  aim to modernize their merger guidelines to help detect potentially anticompetitive deals in light of Congress’s investigation of competition in digital markets in 2020.

United Kingdom and European Union

• The existing competition law framework—Treaty on the Functioning of the European Union Article 101 on anticompetitive agreements and Article 102 on abuse of dominance—as well as the equivalent national provisions of EU member states and the United Kingdom apply to the metaverse.
• Like the United States, there are currently no specific competition law rules in Europe drafted with the metaverse in mind. However, EU Commissioner for Internal Market Thierry Breton said recently that the EU Digital Markets Act (DMA) provides the appropriate framework and necessary tools to tackle issues concerning the metaverse.
• The DMA—agreed on in March 2022, and expected to come into force in the coming year—is a major tool for European competition enforcement in the digital sector, adding to the existing competition law framework under Articles 101 and 102. 
• Although some of the new rules may not apply directly to the metaverse, they may if the relevant operators are Big Tech companies, or if other companies operating on the metaverse become so-called “gatekeepers.”

Conclusion

As the metaverse landscape continues to take shape, regulators will need to strike a fine balance between ensuring a competitive environment and not inhibiting innovation in this rapidly evolving area. Likewise, organizations involved in the metaverse should take note of existing and emerging legislation before taking projects forward.