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How to begin regulating a digital reality world

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Augmented reality is rapidly bringing the physical and digital worlds closer. While this can create value for businesses, it also means new challenges such as who owns augmented spaces that government and businesses need to work together to regulate. https://deloi.tt/2YwQKXe

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How to begin regulating a digital reality world

  1. 1. How to begin regulating a digital reality world Businesses and governments should guide augmented reality development
  2. 2. Copyright © 2018 Deloitte Development LLC. All rights reserved. 2 Copyright © 2019 Deloitte Development LLC. All rights reserved. 2 Digital reality can unlock many opportunities for businesses and government • Medical practitioners can simulate surgeries for training • Maintenance workers can view detailed specifications of the part they need to repair • Industrial designers can visualize the facilities • Theme park designers can create immersive experiences Businesses • Immigration agents can see information on shipments and travelers • Emergency responders can view information on unknown spaces • Military and law enforcement officers can use simulated scenarios for training • Inspectors can be provided real-time information about facility they are inspecting Government
  3. 3. Copyright © 2018 Deloitte Development LLC. All rights reserved. 3 Copyright © 2019 Deloitte Development LLC. All rights reserved. 3 But opportunities also bring forth a few challenges. Imagine… You are on a city sightseeing tour with your AR gear. You see a Thai restaurant. But on the next wall near the entrance you notice some graffiti complaining about food poisoning The graffiti exists only in digital world (only seen through AR headset), the restaurant can’t erase it and in fact can’t even see it. “I ordered a chicken taco, a side of guacamole and chips. Right after eating, I felt nauseated and went to sleep. Woke up with massive diarrhea and vomiting. “ 1 2 View in augmented reality 3
  4. 4. Copyright © 2018 Deloitte Development LLC. All rights reserved. 4 Copyright © 2019 Deloitte Development LLC. All rights reserved. 4 Challenges and risks posed by augmented reality 1 Challenges for property and speech rights 2 Questions about privacy and copyright 3 Threat to reputation 4 Risks to revenue streams
  5. 5. Copyright © 2018 Deloitte Development LLC. All rights reserved. 5 Copyright © 2019 Deloitte Development LLC. All rights reserved. 5 Challenges for speech and property rights: Legal battles between AR developers and relevant parties for • Altering the depiction of physical space in digital world • Damaging public property • Trespassing and creating nuisances on a private property Questions about privacy and copyright • More data will be collected and recorded about individuals and surroundings, leading to possible privacy issues • AR potentially infringes on a copyright owner’s exclusive rights to reproduction and alteration AR challenges and risks: Speech and property rights; privacy and copyright Source: Don Behm, “Milwaukee County panel recommends $83,000 payment to mobile app game creator to settle lawsuit prompted by Pokémon Go,” Milwaukee Journal Sentinel, November 30, 2017; Brian Wassom, “Augmented reality law, privacy, and ethics,” Safari,; Brian D. Wassom, “IP in an augmented reality,” American Bar Association, June 29, 2017; Kate Lyons et al., “Online abuse: How different countries deal with it,” Guardian, April 12, 2016
  6. 6. Copyright © 2018 Deloitte Development LLC. All rights reserved. 6 Copyright © 2019 Deloitte Development LLC. All rights reserved. 6 AR challenges and risks: Risk to reputation and revenue streams Threat to reputation • Businesses could be “tagged” in a virtual augmented space depicting negative reviews • The immediacy and physical presence of those reviews in AR could give them much greater weight in the eyes of a viewer Risks to revenue streams • Iconic landmarks or company logos could be used as augmented markers and modified to meet the needs of visitors. • This could lead to third-party actively taking away ROI from the physical owner of location Source: BrightLocal, “Local consumer review survey,” accessed on December 4, 2018; Poppy Lauretta McLeod, et al., “The eyes have it: Minority influence in face-to-face and computer-mediated group discussion,” Journal of Applied Psychology Ryan Erskine, “You just got attacked by fake 1-star reviews. Now what?,” Forbes, May 15, 2018
  7. 7. Copyright © 2018 Deloitte Development LLC. All rights reserved. 7 Copyright © 2019 Deloitte Development LLC. All rights reserved. 7 For businesses, mitigating these risks typically means controlling access to augmented spaces Current approaches: GPS or IP address • When a device wishes to use an app: it would not only validate the device and any user credentials, but also check the reported location of a device against the rights of the AR application provider • If rights are not matches, AR experience can be denied Evolving approaches: Digital addresses for physical spaces • Every physical space could be identified with a unique number with access to specific owner. This potentially could prevent third party or competitors from launching any AR experience Source: Martin Derbyshire, “What is geolocation and how it works on gambling websites in NJ,” NJ Gambling Websites, April 9, 2018.
  8. 8. Copyright © 2018 Deloitte Development LLC. All rights reserved. 8 Copyright © 2019 Deloitte Development LLC. All rights reserved. 8 All of these approaches to controlling augmented spaces come with pros and cons • Geofencing can be circumvented • Unique IP-type identifiers need to be 3 dimensional and time bound • Digital addresses also likely require an independent 3rd party to manage and assign them The end result is that businesses cannot do it alone. The solution should come from businesses and government iterating together. Technology alone cannot solve the problem
  9. 9. Copyright © 2018 Deloitte Development LLC. All rights reserved. 9 Copyright © 2019 Deloitte Development LLC. All rights reserved. 9 Regulators can consider the four principles to mitigate some of the challenges posed by AR
  10. 10. Copyright © 2018 Deloitte Development LLC. All rights reserved. 10 Copyright © 2019 Deloitte Development LLC. All rights reserved. 10 • Review current applicable laws, regulations, and rules. • Potential policies that should be reconsidered include property laws, privacy regulations, and copyright and intellectual property rights. Principle #1: Review and understand existing regulations
  11. 11. Copyright © 2018 Deloitte Development LLC. All rights reserved. 11 Copyright © 2019 Deloitte Development LLC. All rights reserved. 11 Principle #2: Take an adaptive approach to regulation • Adaptive regulation relies on iterative process of designing regulation. • It also has faster feedback loops that allow regulators to evaluate policies against set standards, feeding inputs into revising regulations.
  12. 12. Copyright © 2018 Deloitte Development LLC. All rights reserved. 12 Copyright © 2019 Deloitte Development LLC. All rights reserved. 12 Principle #3: Encourage adoption of soft laws • Soft laws can include guidance, a push for industry self-regulation, best-practices codes, codes of conduct, and third-party certification and accreditation. • It allows regulators to quickly respond to changes as these laws don’t have to go through legislative process.
  13. 13. Copyright © 2018 Deloitte Development LLC. All rights reserved. 13 Copyright © 2019 Deloitte Development LLC. All rights reserved. 13 Principle #4: Test regulatory approaches in sandboxes • Sandboxes are controlled environments allowing innovators to test products, services, or new business models without having to follow all the standard regulations. • It allows government and business to partner in technology experimentation, while simultaneously testing the effects of proposed regulations.
  14. 14. Copyright © 2018 Deloitte Development LLC. All rights reserved. 14 Copyright © 2019 Deloitte Development LLC. All rights reserved. 14 Contacts William D. Eggers Executive Director, Deloitte Center for Government Insights Deloitte Services LP +1 571 882 6585 weggers@deloitte.com Allan Cook Managing Director Deloitte Consulting LLP +1 213 688 5360 allcook@deloitte.com Link to the full study: How to begin regulating a digital reality world
  15. 15. Copyright © 2018 Deloitte Development LLC. All rights reserved.15 Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms. Copyright © 2019 Deloitte Development LLC. All rights reserved. This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication. About Deloitte Disclaimer

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