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The article seems a bit silly, but online harassment is an actual issue and can have a big impact, especially for minors. The way it's presented, especially the Daily Mail article (“British police probe VIRTUAL rape in metaverse” and the mentioning of AI) is a significant (perhaps deliberate) misunderstanding of the problem for the sake of clicks. In reality, this situation isn't that different compared to Omgele back in the day, but instead it's compared to physical SA. I think this kind of clickbait reporting does not contribute to bringing awareness to the issue of digital harassment, nor to a greater understanding required to solve it. It's presented as a new threat (like DM likes to do), but in fact this is simply a new form of online harassment, like we've been seeing for years.
Kids as young as 8 years old are being given unsupervised access to the internet. This alone seems very unhealthy, but it also means that other individuals get access to them. Grooming and online harassment have been an issue since SMS, and probably will be. The police does not have the expertise and capacity (or perhaps motivation) required to deal with these situations. The online platforms fail at moderation, some allow users to send death threats while using some bot to block swearwords. Malicious actors rarely face any consequences online. The parents also usually don't have a clue about what their kids are doing, nor how the platforms their kids use work, which means they are unable to teach their kids what to avoid.
I believe to solve these issues, this kind of behavior should come with actual consequences. However, I don't have high hopes this will help soon. I therefore believe education also plays a role, both for the parent and their children. Kids should learn about social norms for the internet and what to do when people disregard them, and parents should have the knowledge to help them. The platforms themselves should also take action, the amount of moderators on social media is pathetic. Facebook has millions of users but only has 54 moderators (spanning all their services including Instagram) to moderate posts in my country's language. Current social media is a breeding ground for disinformation, rage, and harassment, not because it's impossible not to, but because all major platforms have switched to an engagement based algorithm.