What is the "Metaverse Principles" Version 2.0? An Explanation of Legal Risks and Utilization Strategies for Businesses

As the temporary boom initiated by the COVID-19 pandemic begins to settle, the metaverse is now transitioning into a “social implementation phase,” where concrete use cases that contribute to solving societal issues are steadily increasing. According to the latest report published by the Ministry of Internal Affairs and Communications, the metaverse is spreading as an “infrastructure for solving societal issues” not limited to specific fields, and it is predicted to become a market exceeding 500 billion dollars globally by 2030.

For companies to effectively utilize the metaverse, it is essential to recognize it not merely as a virtual space but as a “new arena for economic and social activities” that is continuous with the physical world. To ensure that the design and operation within the metaverse do not undermine democratic values, while also promoting innovation and ensuring user safety and security, the Ministry of Internal Affairs and Communications has established “Principles for the Metaverse,” providing guidelines that should be adhered to.

This article explains the essence of utilizing the metaverse and the key points of risk management from a legal perspective under Japanese law.

Principles of the Metaverse Supporting Social Implementation in Japan

The metaverse is defined as a virtual space accessible via networks, enabling communication among users. It is broadly categorized into two types: the “VR Metaverse,” which is independent of reality, and the “AR/MR Metaverse,” which overlays digital information onto physical spaces.

Recently, there has been significant attention on the expansion of industrial and business use. Utilization is accelerating in fields such as workplace education, civil engineering and construction sites, and manufacturing sites. It is estimated that by 2030, the market for corporate use within Japan will reach approximately 1.6 trillion yen.

Amid this rapid proliferation, the Ministry of Internal Affairs and Communications in Japan formulated the “Principles of the Metaverse” and published a more detailed “Version 2.0” in 2024. These principles aim to ensure that the metaverse develops healthily as an infrastructure to solve social issues, rather than being a transient trend. Specifically, they provide guidelines for businesses to follow in design and operation, emphasizing respect for individual dignity, ensuring diversity and inclusivity, and creating an open environment that does not hinder innovation. Although these principles do not have legal binding force, they are expected to form the basis for future legal frameworks and international standardization. Therefore, it is strongly recommended that businesses build governance in line with these principles when expanding their operations.

Reference: Ministry of Economy, Trade and Industry | Publication of the 2025 Report and Results of Public Comments on the Study Group for Realizing a Safe and Secure Metaverse

Benefits of Utilizing the Metaverse for Japanese Companies

The primary objectives for implementation are centered around enhancing productivity, skill transfer, and improving safety and customer satisfaction.

In terms of advancing skill transfer and training, for instance, at Daikin Industries, a Japanese air conditioning manufacturer, new service engineers are conducting troubleshooting training in the metaverse. This allows them to experience operational data and visual elements of the field that cannot be obtained through manual-based classroom learning alone. As a result, high-quality training can be provided globally without the constraints of actual equipment or location.

Moreover, improving operational efficiency and safety are significant advantages. In the case of Shimizu Corporation, a system was developed to combine building inspection data obtained from 3D laser scanners with design drawings (BIM) in the metaverse, enabling remote inspections. This innovation eliminates travel time and reduces the risk of accidents for inspectors working at heights.

Additionally, the creation of new customer touchpoints is anticipated. Retailers such as Mitsukoshi Isetan and Daimaru Matsuzakaya Department Stores are constructing virtual stores linked with their physical stores and events, offering the experience of “shopping with someone” that was challenging with traditional e-commerce sites. These initiatives are also expected to serve as a third business model, including the sale of digital items in collaboration with creators. In this way, the metaverse is beginning to establish itself as a practical tool for solving real-world challenges through digital means.

Legal Risks and Countermeasures Indicated by the “Principles of the Metaverse” in Japan

When utilizing the metaverse for business, there are numerous issues to consider. Based on the Ministry of Internal Affairs and Communications’ “Principles of the Metaverse (Version 2.0),” we will organize the key points to be aware of.

Privacy and Protection of Biometric Information

In the metaverse, especially when using head-mounted displays (HMDs), a large amount of multimodal sensitive data such as users’ gaze, movements, and physiological responses can be collected. It is necessary to clearly define what behavioral data is collected and how it will be used, and to establish a process for obtaining individual consent from users. From the perspective of the Japanese Personal Information Protection Act, the data collected should be limited to what is necessary to achieve the intended purpose, and the retention period should be minimized.

Additionally, when using AR or MR devices in outdoor or public spaces, there is a risk of infringing on the privacy of third parties who are not using the devices. Hardware measures such as indicating recording with an LED light, as well as operational considerations like alerting users, are required.

Intellectual Property Rights and User-Generated Content

The appeal of the metaverse lies in users creating and sharing content themselves, but this can also become a breeding ground for rights infringements. To ensure creators can create with peace of mind, it is necessary to clearly state the rules regarding the ownership of intellectual property rights and secondary use through terms of use and guidelines.

Moreover, generating and using avatars that mimic real people or famous personalitys without permission may constitute an infringement of portrait rights or publicity rights. When operating or utilizing a platform, it is important to have a system in place to quickly freeze accounts or take other actions when defamation or rights infringements are confirmed.

Safety and Responsibility Sharing Among Stakeholders

Attention must also be paid to the physical and psychological risks brought about by the unique “spatial experiences” of the metaverse. In AR and MR, where information is added to the physical space, it is essential to verify safety, such as whether the display of information obstructs the worker’s view and leads to accidents.

Furthermore, in preparation for any issues that may arise during events or experiential content within the metaverse, it is necessary to clearly define the responsibilities among platform operators, world providers, and users in advance through contracts or other means.

Protection of Brand Value and Zoning

In spaces where a large number of unspecified individuals participate, there is a risk of defamation or actions contrary to public order and morals, which could damage brand value. It is recommended to explain in simple terms or visuals the nature of the space your company provides (e.g., business-only or a place for free interaction) and to conduct appropriate “zoning.”

When business transactions are involved, measures to verify the “authenticity” of the person behind the avatar, such as granting a verified mark, are key to enhancing reliability.

Conclusion: Consult a Japanese Attorney for Governance in Metaverse Utilization

The metaverse holds significant potential to expand human possibilities beyond physical constraints and enhance the productivity of society as a whole. However, handling confidential information and personal data within this space is more complex and sensitive than traditional internet services.

Moving forward, it is essential to adopt a multi-layered approach to building trust, not only by ensuring compliance with Japanese law but also by integrating privacy and safety from the design phase, such as through “Privacy by Design.” When addressing these challenges, it is highly beneficial to seek advice from attorneys well-versed in IT technology and the latest business models, beyond just interpreting codified laws. If you are considering developing a metaverse business in Japan, please consult with a specialist.

Guidance on Measures by Our Firm

Monolith Law Office is a legal firm with high expertise in both IT and law, particularly in the realm of the Internet. Our firm provides comprehensive support for businesses involved in the metaverse, Web3, as well as crypto assets and blockchain. Detailed information is provided in the article below.