The confusion of regulation behind Wal Mart’s joining metaverse

Global digital governance | the confusion of regulation behind Wal Mart’s joining metaverse

Lu Na, researcher of surging Research Institute

Since Facebook, the Internet social media giant, announced last year that it would change its name to “meta” and focus its future development strategy on the establishment of “metaverse”, the concept of metaverse has continued to be hot. Wal Mart, a well-known multinational retail enterprise, also actively followed up. It started to apply for trademarks such as “verse to home”, “verse to curve” and “verse to store” at the end of December last year, and expressed its intention to provide users with virtual currency and non homogeneous token (NFT), as well as sell virtual goods in Augmented Reality (AR) and virtual reality (VR), including electronic products, home decorations, toys, sporting goods and personal care products.

At present, many industries and brands around the world are actively joining metaverse, hoping to create their own business ecosystem around the blockchain to grasp future business opportunities. However, metaverse, which is based on media and VR / AR technology and has the main function of connecting virtual reality and reality, has derived many new regulatory challenges and governance needs different from the complete real world. Not long ago, Shane Tews, a senior researcher at the American Enterprise Institute, wrote in his article “will joining metaverse make Wal Mart a technology company?” (Would Joining the Metaverse Make Walmart a Tech Company?) It raised a series of questions about the application of regulatory policies for Wal Mart’s business in metaverse, which may be regarded as a necessary “cold thinking” under the current “metaverse fever”.

According to Shane Tews, Wal Mart, a large multinational retailer, is actively marching into the high-tech field of metaverse. It not only wants to develop business applications, but also plans to create its own digital currency and non homogeneous token (NFT). These measures have actually made it one of the Internet technology companies. Given that the U.S. Congress is accelerating the anti-monopoly legislative process of technology giants, some of Wal Mart’s practices may be contrary to the current legislative norms.

Shane Tews pointed out that the current regulatory issues that need to be carefully considered in the United States should include: first, as a traditional retail enterprise, Wal Mart is trying to transform its business from web2 Upgrade the online platform mode of 0 to Web3 In the process of 0metaverse ecosystem, if it is necessary to acquire technology start-ups, should it also comply with the business merger guidelines formulated by the Federal Trade Commission and the Department of justice for technology giant companies? Second, Wal Mart plans to provide users with e-commerce application downloads that can enter metaverse for commodity transactions. Should the functions including Internet access, reading, tracking and data sharing also be regulated as a safe online experience under the current law? Third, should Wal Mart abide by the “non self preferential treatment principle” tried to be enforced by the anti-monopoly legislation of technology giants in the United States (“self preferential treatment” refers to the preferential treatment given by Internet companies to their own products on their own platforms)? Fourth, should Wal Mart, like Amazon, apple and Google, be required to allow all users free access to its specially developed metaverse technology and security platform?

For the fourth question, Shane Tews believes that for large retailers like Wal Mart, because its security procedures for users to access metaverse will be built into the virtual product design, if the US patent and Trademark Office, which is responsible for the supervision of such businesses, requires Wal Mart to cancel these security procedures and open access to its metaverse platform, Wal Mart can only choose to comply with them, However, doing so will undermine the user information security and privacy protection in metaverse. At the same time, the U.S. innovation and choice online act and the open application market act pushed by the U.S. Congress have formulated a series of non discriminatory provisions to prevent the application stores controlled by technology giants from deleting unaudited applications (APPs), which is intended to change the closed ecology of application stores and promote market competition in the digital economy. However, should these regulations also apply to the closed and secure e-commerce system created by traditional commercial companies such as Wal Mart to join metaverse? If applicable, will it hinder its participation in metaverse? These problems are still inconclusive. However, in the context of “running into” metaverse in all walks of life, if the new demand for digital supervision under the metaverse framework is ignored for a long time, it is obviously not conducive to the health and safety of the whole ecology.

As a global retail giant, Wal Mart’s metaverse layout represents the direction of the evolution of the whole industry to a certain extent. The questions raised by Shane Tews in the article actually highlight the contradiction that the existing regulatory framework in the United States lags behind in regulating emerging technologies and innovative applications. However, the regulatory issues surrounding metaverse, a new thing, are far more than that. In order to properly deal with the great challenges brought by the new model of virtual economy in metaverse, it is necessary for all countries to plan corresponding regulatory innovation as soon as possible. Specifically, it can focus on the following three main aspects:

I. establish a fair and effective system guarantee for safeguarding data rights and interests and the safety of data assets. There are a large number of digital assets in metaverse ecology, so digital asset certificates are needed to promote metaverse’s economic cycle. Virtual currency and non homogeneous token (NFT) will become important tools to realize the digital asset and circulation of virtual goods. However, there are still many risk points in the NFT investment market, including the compliance risk of the NFT trading platform itself, the compliance risk of the NFT issuer, and the liquidity risk of NFT buyers when reselling. In addition, the virtual world is not an illegal place. At present, it is also necessary to curb the excessive speculation of metaverse investment driven by capital, so as to effectively supervise and promote the maintenance of market stability and healthy development. 2、 Properly regulate the underlying architectures such as algorithms and smart contracts that support metaverse ecology. The ideal metaverse platform should be a public infrastructure that is not monopolized and controlled by a national government, technology giant or operator, so as to maintain the safe and orderly operation of the virtual world. Therefore, the basic algorithm needs to ensure fairness, transparency and compliance with ethical norms to avoid negative problems such as algorithm discrimination and algorithm exploitation. 3、 According to the decentralized characteristics of virtual economy and social activities in metaverse, establish corresponding regulatory norms. In the era of digital economy, metaverse will promote the transformation of the whole economic organization from centralization to decentralization. This will be quite different from the top-down centralized management paradigm commonly used in today’s real world. Therefore, it is necessary to establish a governance and supervision mechanism suitable for Dao (decentralized autonomous organization). For example, in metaverse, which transcends the boundary of sovereignty, the virtual activities of individuals and various economic actors based on the same application are likely to span different countries and regions. If there are illegal acts, how to carry out international coordination and cooperation supervision itself is an issue that needs in-depth research. In short, since all industries may be empowered and upgraded through metaverse in the future, and metaverse will also be closely related to national and regional development, the government, law and regulation should not be absent in the early stage of metaverse development, but should be integrated with metaverse’s technological evolution, and realistically and rationally reconstruct the connection mode between virtual and real world, as well as between human beings, The overall tension of scientific and technological change.

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