‘Snow Crash’, the famous 1993 science fiction novel that coined the term ‘Metaverse’, tells the story of the dominance of a single corporation named the Global Multimedia Protocols Group. In real life, will we see such an entity (or entities) dominate the metaverse? Will big technology companies like Google and Meta become gatekeepers of the metaverse? Can you expect a collaborative space at its core? In this three-part series, Adgully attempts to find answers to these questions.
You might think it might be premature to ask such questions about a nascent concept. Recently, however, the European Commission (EC), in its latest talks on virtual worlds, expressed concern that these tech giants would dominate the metaverse, leaving smaller players to fend for themselves. .
The EU consultation document raised concerns that “a small number of large companies risk becoming the future gatekeepers of virtual worlds, creating market entry barriers and crowding out EU start-ups and SMEs”. [small and medium-sized enterprises] out of this emerging market.”
Are the concerns genuine or misplaced concerns?
This concern is also shared by Friedrich Wenzel Bulst and Sophie De Vinck of the EC Competition Directorate, writing about potential pitfalls of competition or dominance in the metaverse.
“For example, a Metaverse Gatekeeper may encourage users to adopt certain services or products by bundling them with “essential” metaverse hardware or software. They may charge exorbitant prices to access the Metaverse or some of the Metaverse-based products. They may enter into exclusive agreements with certain third-party providers of Metaverse services, reducing consumer choice and limiting access to competitors’ platforms. We can also use our unique insights into user behavior (based on access to specific data) to strengthen our market power both inside and outside the metaverse market,” they wrote.
Most of the experts Adgully spoke to agreed that the EU’s concerns were genuine.
The European Commission’s concerns over the domination of the Metaverse by online giants like Meta and Google have raised eyebrows and prompted scrutiny, he said. Aahan Dogra, Founder, NoCap MetaThe commission’s concerns are valid, as these tech giants have a history of cornering the market, Dogura said. But he adds that the metaverse is still a nascent realm, offering opportunities for crappy startups and innovative local companies to challenge Goliath. The metaverse is the next frontier, much like social networking was when it started” (Zuckerberg, 2021). In this digital his odyssey, “Where there is a (digital) will, there is a (virtual) way!”
Big companies risk becoming the future gatekeepers of the virtual world, creating market entry barriers and crowding out EU start-ups and SMEs from this emerging market, he said. Samir Dhanrajani, President of 3AIWith the EU’s recent passage of the Digital Markets Act, Internet companies such as Google, Amazon and Meta will be subject to greater scrutiny to prevent potential anti-competitive behavior. Nonetheless, there are growing concerns that such trends could emerge in the future incarnation of the digital economy. passed a bill authorizing additional data controls for some. The bill is not specifically aimed at the cryptocurrency industry, but rather focused on Internet of Things devices. ”
The potential for large tech companies like Meta and Google to dominate the Metaverse and act as gatekeepers is real. Sumit Ghosh, CEO and co-founder of ChingariThese companies already have sizable virtual presences with their respective platforms Facebook and Google offering a wide range of services including social networking, advertising and search.
Overall, according to Ghosh, the EC’s concerns are genuine and require the attention of policymakers and regulators to ensure a level playing field for all players in the ever-growing and evolving metaverse. .
Ghosh said the growing popularity and importance of the metaverse around the world means that powerful decentralized organizations must fight these companies and prevent them from abusing their market power. “They can also use their advantage to control access to users and their data, raising privacy and antitrust concerns. This is where companies/startups can be game changers, offering an alternative to centralized gatekeepers,” he says.
Agree with Ghosh, Anantha Krishnan, MOI FounderBeing a context-aware P2P protocol, says the concerns expressed by the EC are very valid. “As giants with tons of resources and reliable backing, Meta, Google, Microsoft, Amazon, etc. have the scale aimed at them and the ability to capture a significant market share, while smaller companies “It leaves a few percent to the Metaverse and startups. But while it’s not entirely possible to be the gatekeepers of the Metaverse, it’s possible they could be major players in this market,” he says.
Thanks to open source projects paving the way for new projects, and the sheer passion and business orientation of developers and entrepreneurs, the level of innovation in Metaverse technology is impressive every day. The threat to this momentum is of concern to the ecosystem as a whole, they opined. Kaavya Prasad, Founder of Lumos LabsAccording to her, large tech companies like MANGA (Meta, Amazon, Netflix, Google, Amazon) power blocks pose a significant obstacle to the growth of indie projects and smaller companies. “Big tech companies with the money and the technology have an unfair advantage over indie projects and companies. Internal policies within these organizations serve only their own interests. Yes, it will definitely impact the overall innovation index of the metaverse technology,” she adds.
According to Kaavya Prasad, responsibility lies in the hands of regulators and policy makers, who can neutralize such unfair behavior by promoting fair competition and innovation. “It all comes down to a focus on protecting the interests of all stakeholders in the metaverse. Additionally, the web3 sector is a major player within the metaverse space, driving openness and transparency. Given the large market share of the web3 metaverse, it can prevent the dominance of the web3 technology giants as the adoption of web3 products and technologies continues to grow.Development of the metaverse is not an isolated activity, but rather a government, It requires the participation of multiple stakeholders, including businesses and individuals,” she points out.
“However, I hope that ethical practices will prevail among MANGA companies without the intervention of regulators and policy makers. You can expect to be able to participate equally in ,” she adds.
Opinion that big tech companies such as Meta and Google are definitely ahead of the competition when talking about the Metaverse Samir Asher, Founder and COO of Tonic Worldwide“They have limitless resources and a strong online and offline presence, which means they could potentially control access to the metaverse and set the rules for how things work.” However, the concept of the Metaverse is still in its infancy and we do not know how it will work in the future.There is plenty of room for new businesses to thrive and carve out their own niches in this all-new digital environment. Only will tell you!”
Role of regulatory bodies
Concern about the potential superiority of big technology has led regulators to ensure the development of open and accessible virtual economies and communities. Primarily confined to games, his Web3 sector has resulted in rapid expansion and adoption of Metaverse and Web3 technologies.
Anantha Krishnan points out that the Metaverse as a technology has been around for some time and its growth has been largely driven by the innovator and start-up sectors. “The gaming industry already has a big head start against these big tech giants, with far more advanced and sophisticated companies. Gaming platforms like Fortnite, Roblox, Decentraland and Sandbox have huge With a large user base, these companies are in the relatively early stages of entry and experimentation, yet regulatory intervention could be key to preventing oligopoly,” adds Krishnan.
“With standardized rules and procedures to ensure an open and accessible virtual economy and community development, entry into the metaverse should be easy. Another catalyst is web3, which is currently thriving within the metaverse. Sector: The Web3 Metaverse, primarily confined to the gaming industry, has led to rapid expansion and adoption of the Metaverse and Web3 technologies.Digital Assets and NFTs have been used to create in-game digital rewards, assets, and tokenized collectibles. , has been a driving force behind its popularity and growth through exclusive NFTs, etc. These have also been one of the key tools used by the fashion industry to solidify its entry into the world. A virtual world full of young people through clothes, shoes, retailers and more,” he explains.
As the Metaverse offers unparalleled opportunities for innovation and economic growth (until the next iteration), the European Commission has expressed concern that current big technologies will reinforce their position as gatekeepers of these opportunities. bottom. ReelStar Co-Founder Navdeep Sharma“This narrow-minded view is echoed by other ‘digital sovereignty’ holders around the world. The fact is that the digital revolution now symbolized by the Metaverse is truly global and only (reluctantly) recognizes current sovereign states if forced to do so. The revenues of big tech companies exceed the GDP of most countries. But their reach, pervasive presence in the global social and digital fabrics, and economic power are even better,” says Sharma.
According to him, tech giants by their very nature drive innovation, and their size and influence are the main factors enabling this innovation.
“The EC, like any other sovereign state institution, will sacrifice not only the ability to control the digital revolution, but also the market diversity and economic functioning of the state to allow these tech giants to act as the gatekeepers of these opportunities. And health.However, this concern is more prospective than reality.The tech giants have shown a propensity to become monopolistic.They will inevitably through aggressive market strategies and acquisitions. They wield great power over acquired digital markets, and such dominance can have detrimental effects on other firms. I just have,” he adds.
As has been shown too often, history repeats itself. Countries that were once great powers have fallen from their position. The companies that dominated certain sectors no longer exist or are in shadow of what they once were. The relatively short-lived digital revolution also clearly follows this pattern.
Sharma feels that if the regulatory framework is approached from a restrictive perspective, it will have little lasting impact in the long run. He said that the EC’s focus is not only on resources, but on fair and inclusive virtual spaces, individual rights and privacy, in an environment of international, entrepreneurial and collaborative culture and broad support for information sharing. He stressed that it should be in policies and guidelines that promote protection. An empowered and educated consumer is the best strategy for the Metaverse to serve everything, not just Big He technology, he says.
(Tomorrow – Part 2: Should country-specific legislation be enacted to address the potential threat of Big Tech’s monopoly?)