Sittings · Document
Follow up to the European Parliament non-legislative resolution on policy implications of the development of virtual worlds – civil, company, commercial and intellectual property law issues
Rapporteur: Axel VOSS (EPP / DE), Ibán GARCÍA DEL BLANCO (S&D / ES)
Reference numbers: 2023/2062 (INI) / A9-0442/2023 / T9-0029/2024
Date of adoption of the resolution: 17 January 2024
Competent Parliamentary Committee: Committee on Legal Affairs (JURI)
Brief analysis and assessment of the resolution and requests made in it:
The resolution welcomes the strategy of the Commission Communication of 11 July 2023 entitled ‘An EU initiative on Web 4.0 and virtual worlds: a head start in the next technological transition’ and raises the need for careful assessment of all the issues relating to the development of virtual worlds and their effective coverage by existing legislation, especially for when virtual worlds reach maturity. It emphasises the need to ensure human-centric virtual worlds, while protecting the values of the European Union, and raises possible risks and challenges in relation to the identification of users, data protection, especially biometric and behavioural data, digital literacy and skills and the accessibility of virtual worlds to all user groups.
The resolution puts emphasis on the importance of regularly monitoring compliance and ensuring effective enforcement of the applicable legal instruments in force, as well as the need for regular fitness checks of the applicable legal instruments in force. It calls on the Commission to assess the appropriateness of the existing provisions of private international law applicable in the EU; highlights the need for ensuring that applicable terms and conditions are transparent, clear, fair and easy to understand; expresses concern with the use of avatars and decentralised systems in relation to accountability and with the use of non-fungible tokens (NFTs) referencing trademarks without the authorisation of their owners and the need to address infringement; and acknowledges the applicability of liability rules of the Digital Services Act (DSA) and of the special regime established in Article 17 of the Copyright Directive to cover the uploading of user-generated content but calls for further clarification on how existing rules will apply to online content-sharing services that make content available in virtual worlds.
Response to the requests and overview of the action taken, or intended to be taken, by the Commission:
(Paragraph 7) The Commission notes the usefulness of guidelines and best practices, clarifying the legal obligations and responsibilities of each stakeholder involved in virtual worlds (such as platform operators, service providers, developers and users) under the applicable EU law. The Commission will explore appropriate frameworks, bringing together different stakeholders, that could enable the joint development of such guidelines and best practices. The Commission will consider the feasibility of a dedicated action in this direction.
(Paragraph 8) The Commission agrees regarding the importance of regular evaluations to ensure that legislation remains fit for purpose in the digital environment, in line with the Better Regulation guidelines. The ongoing Fitness Check of EU consumer law on digital fairness, as a first step, will examine the adequacy of the existing horizontal consumer protection rules in light of technological developments.
(Paragraph 10) Regarding the protection of personal data, the Commission already stated in its communication that the General Data Protection Regulation (GDPR) fully applies to the processing of personal data in virtual worlds. This includes specific rules on processing of sensitive personal data (e.g. biometric data for purpose of unique identification). Moreover, where the processing of personal data is not necessary for the provision of the service, this service must be provided without it. The Commission is also working on a virtual worlds toolbox for the public (action 3 of the communication) which will include guidance on data protection aspects.
(Paragraph 11) The Commission agrees that virtual worlds should ensure privacy and effectively prevent unauthorised data disclosure, identity theft and other forms of abuse of personal data collected online. The EU Digital Identity Framework will provide users with European Digital Identity Wallets. Their use shall be voluntary and will give users full control over their digital identities. Further, European Digital Identity Wallets should include a functionality to generate user chosen and managed pseudonyms.
(Paragraph 12) Regarding the swift implementation of actions aimed at raising awareness and improving digital skills and literacy, the Commission has already published calls under the Digital Europe and the Creative Europe programmes to support skills building. The Commission will also publish soon the online toolbox for the general public and educational material for educators, parents and children, promoting access and inclusiveness for all.
(Paragraph 16) The Commission is looking into private international law matters in the context of the preparation of the application reports on Brussels Ia and Rome II Regulations, envisaged for adoption in 2024 or early in 2025. Should the reports conclude that some provisions of those Regulations need to be amended, it will propose the amendments in due course.
(Paragraph 20) The Commission takes note of the concerns regarding the accountability of avatars and decentralised systems but wants to point out that the implementation of effective identity management systems is key in all cases in order to allow for their proper and timely identification. Decentralised autonomous organisations (DAO) are decentralised spaces in which communities take joint action and bear collective liability, based on internal governance mechanisms enabled by distributed-ledger technologies. This may make the community as a whole liable but not each individual. This and any related aspect will be further analysed in the upcoming DAO study, which is expected to be published in at the end of this year or beginning 2025. The Commission appreciates the interest that the Parliament takes in this project.
(Paragraph 24) The Commission takes note of the interest of the European Parliament in the developments related to the registration of trademarks in particular the latest update brought by the twelfth edition of the ‘Nice classification’, which allows for the registration of trademarks in classes covering their use in virtual worlds. The Commission agrees with the need to closely monitor the concrete application and practical consequences of the new classification options. The Commission agrees that effective measures are necessary to address infringements where trademarks are referenced in NFTs without the authorisation of the trademark owner; notes however that this type of infringement is relevant in the case of designs as well. The Commission notes that as part of the toolbox against counterfeiting it will initiate a dialogue with stakeholders on the new technologies aiming at adapting intellectual property practices and strategies to virtual worlds and Artificial Intelligence (AI).
(Paragraph 25) As regards the need for further clarification on how existing rules should apply to online content-sharing services that make content available in virtual worlds and how they should be enforced, in 2021 the Commission has issued guidance - on Article 17 of Directive 2019/790. This guidance aims to support the correct and coherent transposition of Article 17 across the Member States.
While the guidance does not specifically mention virtual worlds, the principles outlined therein can be applied to different online content-sharing services (OCSSP), including in principle those that make content available in virtual worlds. Insofar as providers of platform-implemented virtual worlds qualify as OCSSP, they are required to comply with the liability rules set out in Article 17. Even where such service providers do not qualify as OCSSP, they would be subject to the DSA rules to the extent they are providing hosting and online platform services.
The Commission will monitor the development of virtual worlds with a view to ascertain whether further action will be required to ensure the protection of copyright-protected content.
(Paragraph 28) As regards the call to consider broadening the scope of the stakeholders’ dialogue on generative AI, the Commission is monitoring the intellectual property implications of output content generated by or with the assistance of AI and is committed to engage with concerned stakeholders to ensure that challenges and opportunities are adequately addressed. The Commission notes that the stakeholder dialogue to be initiated as part of the toolbox against counterfeiting will cover a wide range of issues related to adapting IP practices and strategies to virtual worlds and AI.
(Paragraph 32) The Commission is working on the virtual worlds toolbox with a modular approach. Sections currently under development include topics and advice in relation to the digital ID wallet, data protection and privacy, disinformation and misinformation, copyrights and intellectual property rights, digital assets, cybersecurity, cybercrime, avatars, equipment needed and respect to all users. The Commission welcomes the recommendation for the next steps of the toolbox’s gradual development and stresses its commitment to sustainable and human-centric virtual worlds.