EU launches investigation into Snap, stock price falls

Investing.com – Thursday pre-market, Snap’s stock price fell 1.6% after the EU launched an investigation into whether Snapchat has taken sufficient measures to prevent child exploitation and illegal product sales on the platform.

The EU investigation is based on the Digital Services Act, which requires large online platforms to strengthen efforts to combat illegal and harmful content, or face fines of up to 6% of their global annual turnover.

EU Digital Affairs Commissioner Helena Vulkering stated in a release: “From child exploitation and contact with illegal products to account settings that undermine minors’ safety, Snapchat appears to have overlooked the high safety standards required by the Digital Services Act for all users.”

The European Commission said they suspect Snapchat lacks adequate protections to prevent users attempting to sexually exploit children or engage in criminal activities from contacting minors.

The Commission also noted that the company’s content moderation tools seem ineffective in preventing the promotion of illegal products like drugs, or age-restricted items such as e-cigarettes and alcohol.

The EU Commission announced it will take over an investigation launched by Dutch regulators last September into Snapchat’s sales of e-cigarettes to children.

This investigation marks the latest regulatory challenge faced by social media platforms operating within the EU, as the implementation of the Digital Services Act imposes stricter obligations on tech companies regarding user safety and content moderation.

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