Kiri

VIRTUAL WORLDS (METAVERSE) ESTONIA Non-paper Introduction/Chapeau  It is crucial to ensure that the possibilities offered by metaverse are fully capitalized on by the European Union and its Member States economies.  Premature regulation could hamper innovation and limit its potential benefits.  We must refrain from implementing new regulations until we have confirmed the need for a regulatory intervention. Therefore, we urge the Commission to conduct a thorough impact analysis before considering new regulation. The metaverse represents a revolutionary concept that has the potential to transform our digital landscape. We welcome that the European Commission is looking into opportunities presented by innovative technologies such as metaverse and preparing for the next technological transition. We must ensure that the EU is ready to lead the development of virtual worlds and fully exploit the economic benefits it brings. This includes ensuring competition and preventing new gatekeepers from forming by guaranteeing interoperability between different service providers. To achieve this, we must avoid regulating apprehensively before being fully convinced that the advantages of any new regulation would outweigh their potential negative consequences. Targeted and evidence- based regulation will allow businesses and individuals to explore new use cases, refine their offers, and fully exploit the metaverse's potential. We believe that the regulation should follow innovation and not anticipate it as premature regulation could stifle innovation and limit its potential gains. Instead, we must ensure our enterprises and citizens a possibility to enjoy a functioning Single Market with simple rules. We need to focus on reducing administrative burden and simplifying the regulatory environment, keeping in mind that (legislative) initiatives must complement the existing system and not duplicate it. According to European companies – as stated in the Single Market Barriers Report – over-complicated EU rules are considered as one of the biggest obstacles for enterprises to grow and scale up cross-border. We should strive to achieve a comprehensive, coherent, and effective regulatory framework that addresses a specific issue or domain without creating unnecessary regulatory burdens. The goal is to avoid duplication and overlapping of regulations, which can create confusion, inconsistency, and inefficiency. When a regulatory issue arises, policymakers should evaluate whether existing regulations are sufficient to address the issue before proposing new regulations. If new regulations are necessary, policymakers should aim to develop a comprehensive regulatory framework that addresses the issue in a holistic way, rather than passing a series of piecemeal regulations that can create confusion and complexity for businesses and consumers. Suur-Ameerika 1 / 10122 Tallinn / ESTONIA Phone: +372 625 6342 / Fax: +372 631 3660 / E-mail: [email protected] / http://www.mkm.ee We are concerned that our complex regulatory framework would start hindering the development of new technologies, which immerse different services. Obligations for digital services have become dispersed over multiple legal acts since there are at least 10 different regulations imposing obligations to any type of digital service. Regarding for example online marketplaces, their obligations are dispersed between different legislative acts, such as the Omnibus ((EU) 2019/2161) and DAC7 ((EU) 2021/514) directives, Platform to Business ((EU) 2019/1150), Digital Services Act ((EU) 2022/2065), General Product Safety (2021/0170(COD)), Short-term Rental (2022/0358 (COD)) regulations and many more. Complying with these comprehensive set of rules entails significant costs even before the company enters the market. We are not convinced that there needs to be a new regulatory intervention to avoid possible gatekeepers emerging in the metaverse. According to our analysis, many future services offered by metaverse would also qualify as core platform services and would therefore be covered by the Digital Markets Act. Additionally, implementing pre-emptive regulations to prevent the emergence of gatekeepers in the metaverse could potentially impose disproportionate constraints on the freedom to conduct business. However, we support promoting interoperability between different service providers by setting up voluntary standards and actively participating in the work of international standards organisations. Therefore, we urge the Commission to refrain from creating unnecessary regulatory burdens and conduct a thorough impact analysis before considering new regulation. (signed digitally) Sandra Särav Deputy Secretary General for Business and Consumer Environment 2 (2)