Definition and characteristics of the metaverse The metaverse describes a virtual, persistent 3D world in which users interact, work, play and carry out economic activities via avatars. In this digital space, technologies such as virtual reality (VR), augmented reality (AR) and classic internet applications merge to create a comprehensive experience. The metaverse therefore represents not only a technological innovation, but also a far-reaching social and economic development with far-reaching legal implications.

Ownership rights to virtual goods The legal treatment of virtual goods in the metaverse, such as land, buildings or NFTs (non-fungible tokens) for digital works of art, has so far mainly been based on contractual agreements and copyrights. In contrast to physical objects, there are currently no specific rights in rem for virtual objects. Users acquire rights of use, the scope of which is determined by platform operators via general terms and conditions (GTC). In the long term, however, there may be a need to define virtual forms of ownership more precisely in legal terms.

Significance of contract law Contracts between users and platform operators govern key legal relationships in the metaverse. These user contracts usually contain comprehensive provisions on the rights and obligations of the parties involved, including extensive license terms for user-generated content and limitations of liability. Due to the great importance of such GTCs, questions of GTC control pursuant to Sections 305 et seq. BGB are particularly relevant and will be subject to more intensive legal scrutiny in future.

Personal rights and data protection in the metaverse Basic personal rights also apply without restriction in the metaverse. For example, users can have their personal rights violated by insults or unauthorized depictions of their avatars. The metaverse also poses considerable data protection challenges. Platforms collect extensive data about users’ interactions, movements and preferences, which is subject to the General Data Protection Regulation (GDPR). Providers must therefore pay attention to transparency, user consent and data protection compliance.

Tax and financial law aspects Transactions in the metaverse, in particular trading in virtual goods using cryptocurrencies or internal platform currencies, raise tax and financial law issues. Profits from sales or exchange transactions within the metaverse could be subject to income tax or VAT. There is currently considerable legal uncertainty here, meaning that tax authorities are increasingly having to specify the legal qualification and tax treatment of such transactions.

Implications for the protection of minors The protection of minors is another relevant area of law for the metaverse. As with traditional internet platforms, providers must ensure that content harmful to minors is only accessible to a limited extent or not at all. The application of existing youth protection laws to the metaverse is obvious, but could require adjustments or extensions to these laws in order to take account of the specific risks of the metaverse.

Criminal law challenges A number of criminal offenses may become relevant in the metaverse, such as fraud through the sale of non-existent virtual goods or virtual identity theft. The application of existing criminal law to virtual offenses is possible, but requires a differentiated approach, as classic elements of the offense must be reinterpreted.

Outlook and challenges for legislation and jurisdiction There is currently no independent “metaverse law”. Instead, it is the task of legislators and courts to adequately apply the existing legal instruments – from intellectual property law to data protection and criminal law – to the challenges of this new, digital environment. This requires the further development and adaptation of existing legal principles in order to guarantee the legal security and acceptance of this innovative technology in the long term.