Metaverse Diplomacy Archives | Digital Watch Observatory

Meta data processing ruled unlawful in Germany

A Berlin court has ruled that Meta unlawfully processed personal data through its Facebook platform, including information belonging to non-users. Judges found the ‘Find Friends’ feature lacked a valid legal basis for handling third-party data.

The court determined that Meta acted as a data controller and could not rely on consent, contract or legitimate interests to justify the processing. Non-users had no reasonable expectation that their data would be collected or stored.

The German judges also ruled that personalised advertising based on platform data breached GDPR rules. The processing was not considered necessary for providing a social media service and lacked a lawful basis.

However, the court accepted that sensitive personal data entered by users could be processed with explicit consent under the GDPR. The ruling is under appeal and may shape future enforcement of the EU data protection law.

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Google launches Project Genie allowing users to create interactive AI-generated worlds

Google has launched Project Genie, an experimental prototype that allows users to create and explore interactive AI-generated worlds. The web application, powered by Genie 3, Nano Banana Pro, and Gemini, is rolling out to Google AI Ultra subscribers in the US aged 18 and over.

Genie 3 represents a world model that simulates environmental dynamics and predicts how actions affect them in real time. Unlike static 3D snapshots, the technology generates paths in real time as users move and interact, simulating physics for dynamic environments.

Project Genie centres on three core capabilities: world sketching, exploration, and remixing. Users can prompt with text and images to create environments, define character perspectives, and preview worlds before entering.

As users navigate, the system generates paths in real time based on their actions.

The experimental prototype has known limitations, including generation restrictions to 60 seconds, potential deviations from prompts or real-world physics, and occasional character controllability issues.

Google emphasises responsible development as part of its mission to build AI that benefits humanity, with ongoing improvements planned based on user feedback.

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Council presidency launches talks on AI deepfakes and cyberattacks

EU member states are preparing to open formal discussions on the risks posed by AI-powered deepfakes and their use in cyberattacks, following an initiative by the current Council presidency.

The talks are intended to assess how synthetic media may undermine democratic processes and public trust across the bloc.

According to sources, capitals will also begin coordinated exchanges on the proposed Democracy Shield, a framework aimed at strengthening resilience against foreign interference and digitally enabled manipulation.

Deepfakes are increasingly viewed as a cross-cutting threat, combining disinformation, cyber operations and influence campaigns.

The timeline set out by the presidency foresees structured discussions among national experts before escalating the issue to the ministerial level. The approach reflects growing concern that existing cyber and media rules are insufficient to address rapidly advancing AI-generated content.

An initiative that signals a broader shift within the Council towards treating deepfakes not only as a content moderation challenge, but as a security risk with implications for elections, governance and institutional stability.

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Meta moves investment from metaverse to AI smart glasses

Meta is redirecting part of its metaverse spending towards AI-powered glasses and wearables, aiming to capitalise on the growing interest in these devices. The shift comes after years of substantial investment in virtual reality, which has yet to convince investors of its long-term potential fully.

Reports indicate that Meta plans to reduce its metaverse budget by up to 30 percent, a move that lifted its share price by more than 3.4 percent. The company stated it has no broader changes planned, while offering no clarification on whether the adjustment will lead to job cuts.

The latest AI glasses, launched in September, received strong early feedback for features such as an in-lens display that can describe scenes and translate text. Their debut has intensified competition, with several industry players, including firms in China, racing to develop smart glasses and wearable technology.

Meta continues to face scepticism surrounding the metaverse, despite investing heavily in VR headsets and its Horizon Worlds platform. Interest in AI has surged, prompting the company to place a greater focus on large AI models, including those integrated into WhatsApp, and on producing more advanced smart devices.

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EU introduces plan to strengthen consumer protection

The European Commission has unveiled the 2030 Consumer Agenda, a strategic plan to reinforce protection, trust, and competitiveness across the EU.

With 450 million consumers contributing over half of the Union’s GDP, the agenda aims to simplify administrative processes for businesses, rather than adding new burdens, while ensuring fair treatment for shoppers.

The agenda sets four priorities to adapt to rising living costs, evolving online markets, and the surge in e-commerce. Completing the Single Market will remove cross-border barriers, enhance travel and financial services, and evaluate the effectiveness of the Geo-Blocking Regulation.

A planned Digital Fairness Act will address harmful online practices, focusing on protecting children and strengthening consumer rights.

Sustainable consumption takes a central focus, with efforts to combat greenwashing, expand access to sustainable goods, and support circular initiatives such as second-hand markets and repairable products.

The Commission will also enhance enforcement to tackle unsafe or non-compliant products, particularly from third countries, ensuring that compliant businesses are shielded from unfair competition.

Implementation will be overseen through the Annual Consumer Summit and regular Ministerial Forums, which will provide political guidance and monitor progress.

The 2030 Consumer Agenda builds on prior achievements and EU consultations, aiming to modernise consumer protection instead of leaving gaps in a rapidly changing market.

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Meta pushes back on EU AI framework

Meta has refused to endorse the European Union’s new voluntary Code of Practice for general-purpose AI, citing legal overreach and risks to innovation.

The company warns that the framework could slow development and deter investment by imposing expectations beyond upcoming AI laws.

In a LinkedIn post, Joel Kaplan, Meta’s chief global affairs officer, called the code confusing and burdensome, criticising its requirements for reporting, risk assessments and data transparency.

He argued that such rules could limit the open release of AI models and harm Europe’s competitiveness in the field.

The code, published by the European Commission, is intended to help companies prepare for the binding AI Act, set to take effect from August 2025. It encourages firms to adopt best practices on safety and ethics while building and deploying general-purpose AI systems.

While firms like Microsoft are expected to sign on, Meta’s refusal could influence other developers to resist what they view as Brussels overstepping. The move highlights ongoing friction between Big Tech and regulators as global efforts to govern AI rapidly evolve.

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Ray-Ban Meta sales drive smart glasses growth

EssilorLuxottica is set to ramp up production of its smart glasses, driven by the success of its Ray-Ban Meta range developed in partnership with Meta. Since their launch in September 2023, over two million units have been sold, with growing user engagement indicating a shift towards mainstream adoption.

The eyewear giant, which has collaborated with Meta since 2019, aims to expand its smart glasses portfolio with new brands and features. The company is also considering subscription-based services and additional functionalities to enhance user experience.

To meet rising demand, EssilorLuxottica plans to increase production capacity to 10 million units annually by the end of next year. Manufacturing will be expanded across China and Southeast Asia, enabling the company to support future product releases, including the development of Nuance Audio glasses with integrated hearing solutions.

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Instagram error hides results for ‘Democrats’

Instagram has been facing backlash after a technical issue caused search results for the terms ‘Democrat’ and ‘Democrats’ to be hidden. Users searching for these terms have encountered a message stating that the results may contain sensitive content. In contrast, hashtags such as ‘Republican’ continue to display posts without such issues. Meta, the parent company of Instagram, has stated that the problem is not politically motivated, as it has also affected other political hashtags.

Social media experts have warned that the glitch could harm Meta’s reputation, particularly in a highly partisan political climate. Matt Navarra, a social media consultant, described the situation as embarrassing for Instagram, suggesting it could fuel conspiracy theories and further divisions among users. Meta has confirmed it is working urgently to fix the issue.

This incident comes at a time of increased scrutiny over Meta’s handling of political content on its platforms. The company has faced criticism from various sides of the political spectrum, and its recent changes to content moderation policies have attracted further attention.

Meta appoints three new board directors

Meta Platforms has elected three new directors to its board, including Dana White, CEO of Ultimate Fighting Championship (UFC) and a close associate of President-elect Donald Trump. Investor and former Microsoft executive Charlie S o nghurst and Exor CEO John Elkann have also joined. Meta CEO Mark Zuckerberg said their expertise would help the company navigate opportunities in artificial intelligence, wearables, and digital connectivity.

White’s appointment strengthens his ties with Zuckerberg, who has become a mixed martial arts enthusiast. The two have shared public exchanges in recent years, with Zuckerberg attending UFC events at White’s invitation. Songhurst has been involved in Meta’s AI advisory group since May, while Elkann holds leadership roles at Ferrari and Stellantis, alongside chairing the Agnelli Foundation.

Zuckerberg has been adjusting Meta’s strategy ahead of a possible second Trump presidency. The company recently promoted Republican policy expert Joel Kaplan and donated $1 million to Trump’s inaugural fund, signalling a shift in its political stance. Meta has also acknowledged past content decisions that were unpopular among conservatives as it prepares for the evolving political landscape.

Meta resolves Australian privacy dispute over Cambridge Analytica scandal

Meta Platforms, the parent company of Facebook, has settled a major privacy lawsuit in Australia with a record A$50 million payment. This settlement concludes years of legal proceedings over allegations that personal data of 311,127 Australian Facebook users was improperly exposed and risked being shared with consulting firm Cambridge Analytica. The firm was infamous for using such data for political profiling, including work on the Brexit campaign and Donald Trump’s election.

Australia’s privacy watchdog initiated the case in 2020 after uncovering that Facebook’s personality quiz app, This is Your Digital Life, was linked to the broader Cambridge Analytica scandal first revealed in 2018. The Australian Information Commissioner Elizabeth Tydd described the settlement as the largest of its kind in the nation, addressing significant privacy concerns.

Meta stated the agreement was reached on a “no admission” basis, marking an end to the legal battle. The case had already secured a significant victory for Australian regulators when the high court declined Meta’s appeal in 2023, forcing the company into mediation. This outcome highlights Australia’s growing resolve in holding global tech firms accountable for user data protection.