After months of wind-up, the European Commission unveiled its initiative for “virtual worlds” today — laying down some proposed guidelines and regulatory concerns for the next evolution of the 3D internet. That makes the European Union the first major global player to propose such an ambitious roadmap for our online future, or at least the online future that tech giants like Meta and Apple are promising. It envisions some interesting “use cases” for the technology, like city governance and planning, and highlights the expected risks around children’s safety and general privacy. But right away, it also points to a question so big it almost escapes notice: What exactly is this VR-assisted, immersive digital world going to be, exactly? Start with the name. Many now resist the term “metaverse” after the company formerly known as Facebook renamed itself to capture the meta-buzz. Rival tech giant Apple used its long-awaited headset launch to try and popularize the phrase “spatial computing” last month as an alternative. The European guidebook doesn’t use either. It coins its own quirky neologism, calling this confluence of virtual worlds “Web 4.0.” (It’s unclear how this relates to “Web3,” the decentralized, blockchain-focused digital infrastructure that the Commission report also muses will be an important part of this virtual world.) “They want to position themselves as a leader, and as going a different path,” said Patrick Grady, a managing consultant for consulting firm Fourtold and editor at the Brussels-based Metaverse EU. “Which is going to get pretty confusing, because Finland has announced a metaverse strategy, and you have Japan, South Korea and ASEAN metaverse strategies. How do you sit around the table with these companies and have to explain every time what ‘Web 4.0’ is?” Still, the authors do slip up once and refer to a “metaverse,” as well as citing the not-inconsiderate amount of research European officials have already done on the nascent virtual world that still mostly goes by that name. Behind this semantic game is a bigger question, of course. Writing for European Pro subscribers, POLITICO’s Gian Volpicelli critiqued the still-undefined nature of “Web 4.0” — something the paper describes as “the expected fourth generation of the World Wide Web”, where “Using advanced artificial and ambient intelligence, the internet of things, trusted blockchain transactions, virtual worlds and XR capabilities, digital and real objects and environments are fully integrated and communicate with each other, enabling truly intuitive, immersive experiences, [and] seamlessly blending the physical and digital worlds.” Exactly how that might take shape is still unclear, to say the least. But what’s actually in the document points to a few possibilities, even if they remain vague. Europe most certainly sees this virtual world as an economic opportunity, worth potentially €800 billion, according to 2022 research from a private firm that the report cites. That doesn’t mean it’s clear how the continent will capitalize on it: A press release from Grady’s organization points out that “EU-based extended reality companies struggle to raise funding compared to their US-based peers and are falling well behind,” something they criticize the report for failing to address. When it comes to governance, the Commission’s paper describes major potential in “smart cities” featuring virtual public services like ones popping up already in Seoul or across Belgium, the Czech Republic and Greece, and the convening of expert groups across nations. It also encourages regulatory sandboxes for virtual reality, similar to the carve-outs created for companies to test AI tools without running afoul of the bloc’s forthcoming AI Act. Grady is skeptical, however, that those sandboxes will be much of a draw for startups looking to break into the space. “If you speak to any young company or young startup, you need to have an incentive to bother” with them, he said. Without that incentive — after all, there is no explicit regulation of these virtual worlds yet — Grady says the sandboxes “seem like at the moment products developed for policymakers, so they can pat themselves on the back and say we have a regulatory product that's pro-innovation.” As thin on details and concrete incentives as Brussels’ document might be, it does give the EU a prime mover’s advantage in the conversation about the metaverse. (Or, uh, “Web 4.0.”) And both Gian and Grady pointed out to me that despite none of the major tech players driving metaverse development being headquartered in Europe, the continent does feature software giants like Germany’s SAP and France’s Dessault, as well as metaverse-friendly global brands like L’Oreal, LEGO and Ikea. (Gian even suggested that Europe’s millenia of cultural heritage, from Greek mythology to Italian cinema, could give it a leg up in the virtual content business.) Much like with AI, the EU’s early efforts will ensure that they’ll have a flag firmly planted in the policy discussion that ensues. “When the firing gun heads off in the EU and the regulation machine gets moving, you can slow it down, you can speed it up, you can change direction a little bit, but it doesn't really stop,” Grady said. “Something like [the AI Act] could now happen with virtual worlds… in maybe three or four years, we could see [something that] I hope to God is not called a Web 4.0 Act.”
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