Will the EU’s Web 4.0 Strategy ‘Lead’ Global Metaverse Efforts?

The EU's renewed pledge to develop immersive worlds has signalled a rekindled metaverse space race

Mixed RealityNews Analysis

Published: July 13, 2023

Demond Cureton

The European Commission (EU) stated on Tuesday it had launched its strategy for leading the global development of Web 4.0 and virtual world technologies, leading to “the next technological transition.”

For the bloc, it aims to boost inclusivity, security, trust, and other metrics for citizens, enterprises, and organisations across the European Union.

According to the EU statement, commissioners believe that focusing on Web 4.0 will allow integration between “digital and real objects and environments,” with “enhanced interactions between humans and machines.”

Drafters have based their strategy for the EU economy post-2030. They also cited a projected €27 billion in 2022 and €800 billion by 2030.

The press statement read,

“Virtual worlds will impact the way people live together, bringing both opportunities and risks that need to be addressed. The new strategy aims for a Web 4.0 and virtual worlds reflecting EU values and principles, where people’s rights fully apply and where European businesses can thrive”

Key Pillars of EU Metaverse Goals

Adhering to the Commission’s 2030 Objectives of the Digital Decade programme, it targeted several key ‘pillars’ for its focus on Web 4.0:

Empowering people and reinforcing skills: This will help the bloc boost awareness, access to trustworthy information, and create a collective of virtual world specialists. The 27-member bloc will set up a talent pipeline to boost skills development via its Digital Europe and Creative Europe programmes.

Business: The EU also wants to create a Web 4.0 industrial ecosystem to build continuity for technologies developed across the region. The Commission states that there is currently no “EU ecosystem bringing together the different players of the value chain of virtual worlds and Web 4.0.”

This will include its proposed Partnership on Virtual Worlds under its Horizon Europe platform, potentially from 2025 onwards. The ecosystem will involve creation tools, growing use cases for immersive technologies, and facilitating “regulatory sandboxes” among member states.

Government: For the next pillar, the Commission wants to back “societal progress and virtual public services.” This includes initiatives such as Destination Earth (DestinE), Local Digital Twins for smart communities, and the European Digital Twin of the Ocean for scientific research. Commissioners also plan to launch its CitiVerse immersive urban environment for city planning, and a European Virtual Human Twin for the medical industry.

Shaping Global Standards: One of the key pillars of the organisation is shaping global standards for “open and interoperable virtual worlds and Web 4.0.” The Commission states that it wants to avoid the technologies being dominated by a few big players.”

“The Commission will engage with internet governance stakeholders around the world and will promote Web 4.0 standards in line with the EU’s vision and values,” the press release concluded.

Comments on EU Web4, Virtual Worlds Plans

Speaking further, Margrethe Vestager, Executive Vice-President for Europe Fit for the Digital Age, said,

“The Web 4.0 and virtual worlds will bring benefits for health, contribute to the green transition and better anticipate natural disasters. But we need to have people at the centre and shape it according to our EU digital rights and principles, to address the risks regarding privacy or disinformation. We want to make sure Web 4.0 becomes an open, secure, trustworthy, fair and inclusive digital environment for all”

This pledge is the foundation for Europe’s vision for the Metaverse, which clearly outlines it in accordance to Europe’s laws and principles. Not only with the EU seek to define the Metaverse on its own accord, but it will compete with differing ideologies on emerging technologies from the United States, the Middle East, and China.

Analysis of the EU’s Renewed Metaverse Ambitions

Demond Cureton, Senior Journalist, XR Today, analysing statements from the European Commission and what they entail for the future of the Metaverse.

Despite many claiming that the Metaverse was ‘dead’ and a failure, an increasing number of reports and vested interests have surfaced over the last few months showing otherwise.

News of the Apple Vision Pro and Meta Quest 3 have reinvigorated discussions on the Metaverse, but it is important that global media pay attention to revealed plans at the government level.

One should note that the Metaverse will eventually become a ubiquitous tool, but will initially face ‘wet blanket’ hearsay, similar to the internet’s rise in the 1990s. Naysayers are reminded that this technological emergence will initially launch as an enterprise-first, top-down initiative with government regulation.

Incrementally rising adoption rates, fuelled by highly-interoperable and open technological ecosystems, developer support, advancements in hardware with slimmer, more comfortable form factors, and improved processing and battery power, are critical to realising the Metaverse’s full potential.

Coordination is Key in the EU Metaverse

Coordination among regulators, government officials, and standards organisations like the XR Association, XR4Europe, the IEEE, and Metaverse Standards Forum will determine the success of the Metaverse.

Furthermore, coordination with companies developing interoperability across regional and global markets will remain inseparable from government-level agendas.

Firms like Meta Platforms, Qualcomm, Ready Player Me, the Khronos Group, and Lamina1 have fully evidenced this via their visibility in global standards development.

Governments want to capitalise on the industry’s lucrative future, especially amid the ongoing economic recession, and build new industry verticals. Old ways of conducting business are giving way to new verticals such as Web 3.0, Web 4.0, and the Metaverse, which offer unprecedented capital investments with rapid growth for future industries.

This is precisely why the Metaverse is such a key component to the health of global markets. Global superpowers such as the European Union, the United States, China, and others are not only assessing the viability of the Metaverse but are taking concrete steps towards building Web4 infrastructure over the next decade.

The EU, Meta, GDPR, and the Metaverse

The news comes just months after Vestager, also the European Commissioner for Competition, urged lawmakers in Brussels to study the Metaverse. Doing so would allow the bloc to create better regulations and ecosystems with clear development rules. These systems would avoid headaches in the future already felt across the Atlantic.

At the time, Vestager said,

“So of course we start analysing what will be the role for a regulator, what is the role for our legislature. That move has in turn triggered concerns about Facebook’s possible dominance. Everything we do must be fact-based and based on the information that we can get… We need to understand it before we can decide what actions would be appropriate”

These discussions come amid a series of disputes over transatlantic data flows with Meta Platforms, with the latter vowing to appeal the EU’s decision to impose a historic €1.2 billion penalty.

Meta spokespeople have slammed the decision, stating the EU had a “lack of regulatory clarity” in its ruling.

Issues concerning the latter’s General Data Protection Regulations (GDPR) are likely to become a central focus on metaverse development over the next decade and beyond.

Furthermore, the EU faced a brief row with Microsoft for its planned acquisition of Activision Blizzard. The Redmond, Washington-based tech giant aimed to develop its metaverse platform technologies with the buyout, stating it would expand availability of titles and build more advanced cloud-based streaming technologies.

Brussels later approved the deal, stating it would not adversely affect European cloud services and businesses.

Questions on EU Web 4.0, Virtual Worlds Plans

Some peculiar bits about the EU’s proposal consist of its focus on Web 4.0. It appears European regulators want to avoid moving into the decentralised Web 3.0 model for web development, moving towards a fast-tracked Web 4.0 ecosystem with tighter regulations across the board.

This is understandable, given the colossal failure of blockchain-centric technological platforms such as cryptocurrencies. Following the deaths of massive exchanges like FTX, the Luna/Terra stablecoin, and others, the EU may want to avoid the chaos and instability of some key web3 technologies.

Additionally, Gary Gensler, Chairperson, United States Federal Trade Commission (FTC), has launched a crusade against such platforms. Across the board, he has accused major global crypto powerhouses like Coinbase, Binance, KuCoin, and others of allegedly selling unregulated securities. US regulatory power could become a massive stumbling block for EU firms in the future as it grows its ecosystems.

This clash between global regulators and Web3 firms may lead the EU to focus more on building a stable Web 4.0 Metaverse under its control, rather than leaving it wholly to decentralised autonomous organisations (DAOs).

The EU may assume this will help regulate Metaverse activities. According to Interpol and others, such preemptive steps would lead to decreased incidences of cybercrime, harmful online content, economic instability, and misconduct.

The EU’s home-grown ecosystem may also help boost compliance, allowing all startups, companies, and technological firms to adhere to regulators in Brussels initially. Doing so will streamline time-to-market agendas for EU-based companies, expedite standards across the bloc, and reduce friction points with global competitors.

EU Friction Points with Rivals

However, the EU’s determination to forge a leading role in the Metaverse could potentially face a massive stumbling bloc: the world’s biggest metaverse platforms are headquartered and host servers based in the United States (Meta/ Microsoft/ Qualcomm/ NVIDIA/ Epic Games/ Unity) and China (Pico/ Lenovo).

For this, the EU will have to leverage hardware manufacturers like Varjo, Lynx, ENGAGE XR, and Siemens, among others, for its agenda, and, conversely, liaise with rival superpowers like the US and China.

Overall, there is some confusion about the EU desiring an “open, interoperable” metaverse, but not developing them on Web 3.0 technologies. Whether or not the EU wishes to develop such a platform with Web3 tools will remain uncertain until it clarifies its stance on why it is failing to address Web 3.0, which is still in its infancy and is projected to take shape over the next ten years.

Preoccupation with Web 4.0 without incorporating Web 3.0, which the Metaverse originally focused on, would be similar to focusing on 6G as a concept rather than developing 5G as a reality.

Entering New Markets?

Understanding the metaverse space race is key in discerning the next moves from global powers and businesses. Amid plans from countries like China, Dubai, Saudi Arabia, the US, the UK, South Korea, and many other technological powerhouses, the EU may have a major impetus to think long-term or face getting left behind.

Furthermore, on 5 July, two major firms — South Korea’s Redbrick Inc and China’s Alibaba Cloud — forged a memorandum of understanding (MOU) to boost their presence across Southeast Asia, Singapore, China, and Japan.

This business-to-business (B2B) and business-to-consumer (B2C) opportunity could potentially rival metaverse platforms like Decentraland, The Sandbox, and Roblox for Asian markets.

Yang Yeongmo, Chief Executive, Redbrick, reaffirmed these target regions offered the “highest degree of interest in [the] metaverse across the globe.”

He added: “[The] expansion of the scale of [the] creator economy market is the basis for the production of high-quality content, which is the reason we’re trying to reach the global market actively, starting off in Asia.”

Unique Song, Regional General Manager, Alibaba Cloud Intelligence, Korea and Japan, stated his company’s strengths linked to the Metaverse and Web 3.0.

He said: “We’re going to act as a bridge for excellent domestic businesses such as Redbrick to reach the global market.”

EU Returns to the Space Races

This bold declaration of expansion into global markets signals a line in the sand to European and US tech giants that have long dominated the space. While many US companies retreat in their metaverse plans, this could spark renewed competition among both US firms and foreign rivalries with US companies.

The EU is calculating its next steps to avoid being excluded from this renewed push to develop the Metaverse. However, it wants to do so with stricter regulations in mind for a protracted and better-coordinated effort.

This will ultimately tackle the chaos of 2022 and 2023, following overinvestment in metaverse technologies, an unstable human resource market, and stagnation in extended reality (XR) investment and adoption rates.



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