Competition in Virtual Worlds and Generative AI - Nexa Center's submission

Competition in Virtual Worlds and Generative AI

Nexa Center's submission

Call for contributions by the European Commission

About the call

eur-lexDigital markets have become one of the main areas of attention for competition law enforcers, as well as for regulatory authorities and legislators, in recent years, as European citizens increasingly build their daily lives around digital products and services.

The concept of “metaverse” or “Virtual Worlds” has come to the fore as a term to describe the next stage in this digital transformation. A “Virtual World” seems to be widely regarded as a simulated, immersive environment – in its ultimate form amounting to a persistent, always-on world that operates in real time and is accessible everywhere. However, there are many different views on the future shape of Virtual Worlds, including whether there will be a single Virtual World platform or, rather, a collection of multiple Virtual Worlds.

On 11 July 2023 the Commission published a Communication on Virtual Worlds and Web 4.0, setting out a vision, strategy and proposed actions to lay the foundations for the long-term transition towards Web 4.0 and the development of Virtual Worlds. The concept of generative artificial intelligence (“Generative AI”) has equally attracted considerable public interest.

The EU’s approach to artificial intelligence centers on excellence and trust, aiming to boost research and industrial capacity while ensuring safety and fundamental rights.

While Virtual Worlds and generative AI systems are still taking shape, it has become clear that the potential impacts of this new phase of digital transformation could be wide-ranging with new technologies, business models and markets.

Digital markets can be fast moving and innovative, but they may also present certain characteristics (network effects, lack of multi-homing, “tipping”), which can result in entrenched market positions and potential harmful competition behaviour that is difficult to address afterwards.

Therefore, it appears opportune for the Commission as a competition law enforcer to engage in a forward-looking analysis of technology and market trends to identify potential competition issues that may arise in these fields.

The purpose of these calls for contributions is to gather specific information and views in relation to competition aspects from regulatory experts, academia, industry and consumer organisations. The Commission may organise a workshop with relevant stakeholders to discuss these issues further building on the responses to the consultation.

Here you can access Nexa Center's submission to the Public Consultation.