• Atharv Joshi

Regulation in the Age of Virtual Reality — What Lies Ahead

Updated: Aug 30

We need a regulatory system that "allows people to create their own realities" but at the same time "ensures that peace exists between those realities".


Virtual reality and automation are rapidly bridging the gap between the digital and the physical worlds. Despite opening doors to a multitude of opportunities, this advancement has led to the emergence of new challenges and problems which cannot easily be solved under the existing rigid rules and regulatory frameworks. I believe that in order to tackle such modern issues of the digital world, cooperation between businesses using such technologies and the government regulating them will be key. Reflecting on the TEDxFromHome interview with Dr. John Danaher, this article of our Pause&Rewind series explores some of the possible regulatory risks that can arise as we move towards achieving a "Virtual Utopia", and what should be done to minimise such risks and challenges.


The first thing that many of us might have observed is that in a virtual reality orientated world, interactions no longer happen in only one physical jurisdiction, thereby causing local governments and institutions many difficulties in regulating efficiently. There is a shift from hosting business meetings in public spaces with public rules that are primarily located within a single jurisdiction, to private spaces in which the parties are situated in multiple jurisdictions. As Dr. Danaher rightly mentioned, such a situation can never be controlled and regulated effectively by "fragmented governments". What is needed now is a "unitary regulatory system" whose responsibility would be to create harmony among all the national regulations on virtual reality and automation. We need a regulatory system that "allows people to create their own realities" but at the same time "ensures that peace exists between those realities".


Moreover, with the development of AR (augmented reality) and VR (virtual reality), interactions between individuals and businesses will mostly take place through networks and devices that are privately owned and handled. These interactions, therefore, may be subjected to contractual terms and conditions that can seriously affect the privacy and liberty rights of the individuals using those devices. For example, many VR gaming platforms store sizable amounts of personal information about us, the users. These data and personal details form our digital footprint and can be used by such platforms to identify us in real life. This privacy invasion will give corporations unprecedented power which will hinder our welfare. We must, therefore, be careful of such unacceptable intrusions.


In a world that is moving towards "a more technologically constructed niche", a broader interpretation of the laws on cyber-security and informational privacy is pivotal.

I feel that in order to ensure a welfare-oriented privacy regulation in a world that, in the words of John, is moving towards "a more technologically constructed niche", a broader interpretation of the laws on cyber-security and informational privacy is pivotal. National governments or an international institution like the UN should set up a limit on a) the type of personal data and information that can be extracted by corporations, b) to what extent the data can be collected and c), the manner in which it should be used.

I think it is also right to regard the use of Intellectual Property (IP) in a virtual world as one of the challenges that must be overcome for the world to keep pace with technological advancements. VR systems allow users to virtually import trademarks, photos, music, and other such IP protected materials into their virtual experiences – without obtaining the required permissions from the owner of such IP rights. In addition to this issue, several jurisdictional challenges come into play while enforcing such claims against the users of those VR systems. VR users log in from several countries whose IP laws might differ significantly from one another. The extent of potential infringement in this area is remarkable because VR creators and systems can create an entire world consisting of contents belonging to someone else, without even giving credit to the IP holder. Anyone reading will agree with me when I say that what these VR creators are doing in this area is both legally and morally wrong.


However, this problem can be minimised by making sure that the IP holders mention explicitly in their contracts with VR creators the liability that can arise if the VR systems breach their IP rights. Challenges may also occur with the "fair use" exception under the copyright law wherein unlicensed use of copyrighted work is permitted under certain circumstances. The development of virtual reality in the near future will most likely lead to an increase in the number of cases of violation of this "fair use" doctrine of intellectual property. VR developers will try their best to defend themselves from copyright infringement allegations by invoking this doctrine. Since there is no clear-cut difference between when a use is fair or not, these VR developers will be able to get away with their breach of intellectual property laws. Don’t you think it would be unfair to the IP holders? Corporations and governments for that reason must take it upon themselves to come together as soon as possible and formulate VR specific standards for the fair use doctrine to prevent this issue from getting any worse as technology progresses.

"The regulatory environment can play a very significant role in hampering or facilitating the dynamic innovatory cycle."


Regulating something as dynamic as virtual reality would definitely not be an easy task, since there is a fine line between efficient regulation and a regulatory system that disincentivises innovation. Governments and business corporations need to work together in order to find the right balance between encouraging innovation and protecting against negative externalities. Moreover, as VR and other forms of automation are developing in ways that can’t exactly be predicted, it is important for all government bodies to use a flexible and adaptive approach which can respond quickly to any change in technology. This approach can include feedback loops, where the outcome of a rule can contribute to the revision of that rule in order to help make it more effective. Additionally, instead of having hard laws like statutes and treaties as regulatory instruments in this area, it might be better to have soft laws like guidelines and codes of conduct which are easier to amend. Such approaches, therefore, can give governing bodies the flexibility to respond to technology- no matter what direction it takes as it evolves.


Dr. Danaher highlighted in his interview that "the regulatory environment can play a very significant role in hampering or facilitating the dynamic innovatory cycle". As the world moves towards becoming virtually utopian, we must make sure that such a regulatory environment is created, which facilitates automation instead of hampering and destroying this wonderful world of virtual reality.


Written by Atharv Joshi. Edited by Robert Fletcher and Aada Orava.


You can view the full interview with Dr. John Danaher by clicking here.


If you have any questions concerning the article, its research, and opinions expressed, do feel free to comment in the comments section, or email atharv@tedxwarwick.com.


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