In-Depth Analysis of the Impact of Stricter Regulation Under the EU Digital Services Act (DSA) on Social Media Platforms

Based on the latest data and analysis I have collected, I am now presenting an in-depth analysis report on the comprehensive impact of the EU Digital Services Act (DSA) on social media platforms.

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The EU Digital Services Act (DSA) is a major digital regulatory legislation passed by the EU in 2022, which has been fully in effect for Very Large Online Platforms (VLOPs) since February 2024. The Act applies to platforms with over 45 million monthly active users, including major social media platforms such as Meta (Facebook, Instagram), TikTok, X (formerly Twitter), YouTube, and Snapchat [1][2].

The core regulatory objectives of the DSA include:

• Transparency Requirements
  : Platforms must disclose content moderation standards, advertising information, and recommendation algorithm logic
• Minor Protection
  : Prohibit targeted advertising to minors and require the implementation of age verification measures
• Risk Management Obligations
  : Platforms must identify and mitigate systemic risks posed by their services
• User Empowerment
  : Provide non-personalized content recommendation options and protect users’ right to know and right to choose

As of December 2025, the European Commission has launched investigations into multiple platforms and imposed the first DSA fine, marking the official entry of the Act into the enforcement phase [3][4].

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Pursuant to Article 43 of the DSA, the European Commission collects annual regulatory fees from large tech companies. The total fees for 2025 amount to

(approximately $62.8 million), representing a 29.3% increase from the €45 million in 2024 [5]:

Platform	Covered Services	Nature of Fees
Meta	Facebook, Instagram	Calculation method challenged in litigation
Google	Search, Google Play, Maps, Shopping, YouTube	Calculation method challenged in litigation
TikTok	Main TikTok App	Calculation method challenged in litigation
Apple	App Store	Involves multiple services

These fees only cover the supervision costs of regulatory authorities and do not include the technical and operational costs that platforms themselves incur to meet compliance requirements [5].

The DSA establishes a strict fine mechanism, with a maximum fine of

[6]. On December 5, 2025, the European Commission imposed the first DSA non-compliance fine of on X (formerly Twitter), citing the following violations [3][4][7]:

• Deceptive Design (Dark Patterns)
  : The paid “Blue Check” verification system misleads users
• Advertising Transparency Violations
  : Incomplete and hard-to-use advertising repository
• Restricted Data Access for Researchers
  : Violation of data accessibility obligations

For Meta, the investigation launched on April 30, 2024, may result in a maximum fine of 6% of its global turnover. Meta’s global annual revenue is approximately $134 billion, bringing the theoretical maximum fine to $8.04 billion [6][8]. In addition, the Amsterdam District Court ruled on October 2, 2025, that Meta violated Article 38 of the DSA, requiring it to provide a non-algorithmically sorted timeline option, or face a fine of

(capped at €5 million) [9].

TikTok will launch new age detection technology in Europe in the coming weeks. The system has undergone a one-year pilot in Europe, predicting whether an account user is a minor by analyzing user profile information, posted videos, and behavioral signals [10]. Accounts flagged by the system will be manually reviewed by professional moderators instead of being directly banned.

Since July 2025, the European Commission has collaborated with multiple countries to test a unified age verification application blueprint, linking the EU Digital Wallet (eID) for adult content platforms, and promoting it to other platforms to meet the compliance requirements of Article 28 of the DSA [11]. Technical options for age verification include [12]:

• High-Effectiveness Methods
  : Credit card verification, open banking verification, facial age estimation
• Identity Document Verification
  : Government-issued documents such as passports and national ID cards
• Behavioral Signal Analysis
  : Inferring age based on user activity patterns

The DSA requires platforms to provide transparency of recommendation algorithms and allow users to opt out of personalized recommendations. TikTok, Facebook, and Instagram currently offer options to turn off personalized feeds [2]. Meta is required to integrate “safety by design” into its product architecture, avoiding design features that may lead to addiction, which requires significant resources to optimize its algorithm recommendation system [6][8].

The DSA requires VLOPs to fulfill the following ongoing compliance obligations, resulting in significant operational costs [6][8]:

Obligation Category	Specific Requirements	Cost Impact
Risk Assessment	Conduct annual systemic risk assessments (illegal content, disinformation, minor risks)	Need to establish specialized teams and processes
Transparency Reports	Publish semi-annual transparency reports covering moderation operations, user reports, and appeal handling	Increased costs for report preparation and auditing
Data Access for Researchers	Open datasets to qualified researchers	Increased costs for data management and security
Explanation of Reasons	Provide clear explanations to users for content moderation decisions	Increased costs for customer service and system development
Advertising Repository	Maintain a publicly searchable database of advertising campaigns	Investment in technical development and maintenance

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Article 28 of the DSA explicitly requires online platforms targeting minors to take appropriate and proportionate measures to ensure a high level of protection of minors’ privacy, safety, and security [2][12]. Major platforms have taken the following measures:

Platform	Measures	Impact on User Growth
TikTok	Default private accounts for users under 16; launched age detection technology	Restricted growth of underage users
YouTube	Default private accounts for users under 16; restricted targeted advertising	Restricted acquisition of adolescent users
Snapchat	Stopped displaying targeted ads to minor users	Reduced precision marketing capabilities
Meta (Facebook/Instagram)	Age verification methods under investigation; algorithm system under review	Reduced attractiveness to adolescent users

On October 24, 2025, the European Commission preliminarily determined that Facebook, Instagram, and TikTok may have violated the DSA’s transparency obligations [13]. The European Commission also launched investigations into Snapchat, YouTube, Apple App Store, and Google Play, reviewing their age verification systems and measures to prevent minors from accessing illegal products [14].

Given the increasingly strict regulatory environment in Europe, the user growth strategies of social media platforms are undergoing structural changes:

1. Geographic Differentiation Strategy
   : Platforms may treat the European market as an independent operating unit, differentiating product functions and content moderation standards from other regions to reduce compliance complexity
2. Prioritizing User Quality Over Quantity
   : In an environment of high compliance costs, platforms may focus more on improving the activity and retention rate of existing users rather than simply pursuing user quantity growth
3. Compliance-First Product Design
   : New product features must consider DSA compliance requirements during the design phase rather than making adjustments after launch, which will affect product iteration speed and innovation capabilities

The European Commission launched DSA investigations into Pornhub, Stripchat, XNXX, and XVideos, accusing them of inadequate age verification, risk assessment, and safeguard measures [11]. Platforms with insufficient age verification may face user access restrictions, directly affecting their user base.

The DSA requires the provision of non-personalized content recommendation options, allowing users to opt out of algorithm-driven feeds. This may lead to:

• Decreased User Dwell Time
  : Non-algorithmically sorted feeds typically have lower user engagement
• Reduced Advertising Display Opportunities
  : Decreased user time directly impacts advertising revenue
• Risk of User Churn
  : Some users may switch to competing platforms that offer more “addictive” experiences

The European Commission expanded its investigation into TikTok to include the “SkinnyTok” issue—a harmful algorithm-driven trend promoting extreme weight loss. Following concerns from EU and French regulators, TikTok banned related hashtags globally and redirected searches to mental health support resources [11]. Such incidents may prompt platforms to adopt more conservative algorithm strategies, reducing content attractiveness to avoid risks.

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The core impact of the DSA on the social media advertising business model is reflected in the following bans [2]:

• Snapchat, Google/YouTube, and Meta (Facebook/Instagram) have stopped displaying targeted ads to minor users
• TikTok and YouTube set default private accounts for users under 16
• This directly weakens the platforms’ ability to monetize advertising targeting the adolescent market

The DSA prohibits the use of special categories of personal data for user profiling and advertising targeting, including [2][15]:

• Racial or ethnic origin
• Political opinions
• Sexual orientation
• Religious beliefs
• Health data

This restricts advertisers’ ability to use refined user profiles, reducing advertising delivery efficiency and pricing power.

VLOPs must maintain a publicly searchable advertising repository containing [2][3]:

• Detailed information of each paid advertising campaign
• Advertiser information
• Reasons for ad display
• Advertising targeting criteria

X (formerly Twitter) was fined €120 million due to its advertising repository being “sparse and hard to use” [3][4][7]. TikTok has committed to providing a searchable and reliable advertising repository to meet DSA requirements [1].

All ads must be clearly labeled, and platforms must explain to users why they are seeing a specific ad. This increases the complexity and operational costs of advertising systems.

Academic research points out that the advertising-driven business model of social media platforms relies on the “attention economy,” maximizing users’ online time and ad exposure through the following design strategies [16]:

Design Strategy	Business Purpose	DSA Compliance Conflict
Infinite Scrolling	Increase page views	May constitute “deceptive design”
Variable Reinforcement (Likes, Comments)	Cultivate user habits and addiction	May stimulate “behavioral addiction”
Precision Push Notifications	Recover churned users	May be regarded as manipulative design
Algorithmic Content Sorting	Maximize user engagement	May create an “echo chamber” effect

The DSA requires platforms to assess and mitigate the risks of their designs to users’ mental health, which fundamentally conflicts with the core logic of platforms profiting by maximizing user attention [16].

Snapchat has recently adopted strategies to strengthen brand safety measures, attracting advertisers amid Meta’s reduced focus on brand safety [17]. Social media is considered the advertising format with the greatest brand safety challenges, and Snapchat’s initiatives may give it a competitive advantage in the compliance environment.

However, overall, DSA regulation may:

• Reduce Advertising Pricing Power
  : Restrictions on data usage weaken the value of precision targeting
• Increase Advertising Review Costs
  : Content moderation and compliance verification requirements increase costs
• Change Advertiser Preferences
  : Some advertisers may shift to platforms or channels with looser regulation

Facing the business model pressures brought by the DSA, major platforms are exploring the following adjustment directions:

1. Exploration of Subscription Models
   : Meta’s “pay or OK” model faces challenges under the GDPR and DMA, and was deemed in violation of the DMA by the European Commission on April 23, 2025, resulting in a €20 million fine [18]

2. Reconstruction of Advertising Systems
   : Maintain advertising value amid reduced targeting capabilities, possibly shifting to alternative solutions such as contextual advertising and context-related advertising

3. Investment in Compliance Technology
   : Treat compliance as a differentiated advantage rather than a cost burden, such as Snapchat’s emphasis on brand safety to attract compliance-conscious advertisers

4. Global Policy Standardization
   : Due to the global operational nature of social media platforms, platforms may choose to apply DSA standards to global operations to simplify compliance (the “Brussels Effect”) [19]

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Dimension	Specific Situation
Regulatory Investigations	DSA investigation launched on April 30, 2024, focusing on the addictive impact of the algorithm system on children and the “echo chamber” effect; preliminarily determined that it may have violated transparency obligations in October 2025
Litigation	Amsterdam District Court ruled on October 2, 2025, that Meta violated Article 38 of the DSA, requiring it to provide a non-algorithmic timeline option
Fine Risk	Up to 6% of global annual turnover (approximately $8.04 billion)
Compliance Measures	Stopped targeted advertising to minors; provided options to turn off personalized recommendations; adjusted algorithm recommendation systems
Impact on Business Model	Restricted access to adolescent advertising market; brand safety concerns may affect advertising revenue; significant investment in compliance technology required

Dimension	Specific Situation
Regulatory Investigations	Underwent DSA compliance investigation in December 2024; preliminarily determined that it may have violated transparency obligations in October 2025; the “TikTok Lite” reward program was required to be permanently taken offline in the EU
Age Verification Measures	Launched new age detection technology (one-year pilot in Europe); collaborated with Yoti on facial age estimation; uses credit card or ID verification when processing ban appeals
Compliance Measures	Committed to establishing a searchable advertising repository; set default private accounts for users under 16; banned harmful “SkinnyTok” hashtags globally
Impact on User Growth	Age verification restricts acquisition of underage users; regulatory pressures affect expansion in the adolescent market
Impact on Business Model	Increased advertising compliance costs in the European market; restricted advertising targeting capabilities

Dimension	Specific Situation
Non-Compliance Penalties	Imposed a €120 million fine by the European Commission on December 5, 2025 (the first DSA fine)
Violations	Deceptive design (Blue Check verification); incomplete advertising repository; restricted data access for researchers
Response Measures	Suspended the European Commission’s advertising account in response
Impact on Business Model	Damaged brand reputation; reduced advertiser trust; continuously increasing compliance costs

Dimension	Specific Situation
Regulatory Investigations	Underwent DSA investigation on October 10, 2025, reviewing its age verification system and minor protection measures
Compliance Measures	Already stopped targeted advertising to minors; strengthened brand safety measures
Competitive Strategy	Attracted advertisers amid Meta’s brand safety controversy; treated compliance as a differentiated advantage
Impact on Business Model	Restricted access to adolescent advertising market; brand safety positioning may attract specific advertisers

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The impact of the DSA is extending beyond EU borders. Due to the global operational nature of social media platforms, to simplify compliance processes, platforms may choose to apply DSA standards to global operations [19]. This means:

• Global content moderation policies align with EU standards
• Global unification of advertising transparency standards
• Age verification measures become industry-wide practices
• Overall improvement in user privacy protection levels

Currently, the DSA primarily applies to VLOPs, but:

• The European Commission is evaluating the possibility of extending DSA obligations to small and medium-sized platforms
• The UK Online Safety Act (OSA) provides a parallel regulatory framework, creating dual compliance requirements
• Australia has introduced the world’s first social media ban for users under 16, forming a global trend

The DSA reveals the inherent contradiction of the advertising-driven social media model, which may give rise to [16]:

• More platforms exploring subscription or hybrid revenue models
• Transformation from the “attention economy” to a “value economy”
• Further expansion of transparency and user control over data usage
• Mental health protection becoming a core consideration in product design

In 2024, the European Commission sent approximately 100 information requests to VLOPs and launched 9 formal investigation procedures [5]. However, regulatory authorities face:

• Severe capacity constraints
• Issues with enforcement failures in some countries
• Industry lobbying pressures
• Geopolitical interference

This may lead to uncertainty in law enforcement intensity, and platforms need to continuously monitor regulatory developments.

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The EU Digital Services Act (DSA) has exerted far-reaching impacts on the compliance costs, user growth strategies, and advertising business models of social media platforms:

1. Significant Increase in Compliance Costs
   : Direct regulatory fees, fine risks, and technical compliance investments constitute multiple cost pressures
2. Restrictions on User Growth Strategies
   : Structural constraints on the acquisition and retention of minor users
3. Pressure on Advertising Business Models
   : Restrictions on targeted advertising and transparency requirements weaken platforms’ core monetization capabilities
4. Fundamental Challenges to Business Models
   : The DSA reveals the inherent conflict between the “attention economy” and user protection

Platform	Short-Term Impact	Medium-Term Impact	Long-Term Impact
Meta	Risk of huge fines; increased compliance investment	Slow user growth; declining advertising revenue	Forced transformation of business model
TikTok	Investment in age verification technology	Pressure on market share in the European market	Need to restructure global compliance strategies
X	Damaged brand reputation	Advertiser churn	Possible forced exit or significant contraction
Snapchat	Regulatory investigation pressure	Opportunities brought by brand safety positioning	Need to continue investing in compliance capabilities

For social media platforms, the following strategies should be adopted in the DSA regulatory environment:

1. Front-Load Compliance Investment
   : Integrate compliance requirements into product design processes to avoid high costs of post-hoc rectification
2. Differentiated Compliance Advantages
   : Transform compliance measures into competitive advantages favored by users and advertisers
3. Diversify Revenue Sources
   : Explore non-advertising revenue sources such as subscriptions and value-added services to reduce reliance on targeted advertising
4. Coordinate Global Policies
   : Establish unified global compliance standards, using EU requirements as a benchmark to simplify operations
5. Reconstruct User Relationships
   : Treat user empowerment as an opportunity to enhance user loyalty rather than a mere compliance burden

The DSA represents an important trend in global digital regulation, whose impact will extend far beyond the EU and shape the future development direction of the global social media industry.

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[1] Global Digital Policy Roundup: December 2025 - TechPolicy.Press

[2] The impact of the Digital Services Act on digital platforms - European Commission

[3] EC Issues First Non-Compliance Fine Under the DSA: X Fined €120 Million - Goodwin

[4] €120 million later: the DSA enters the enforcement phase - MediaLaws

[5] A Drop in the Bucket: EU Charges Big Tech Just €58M Under DSA - PYMNTS

[6] The DSA & OSA Enforcement Playbook - Checkstep

[7] First DSA fine: €120 M for X for deceptive design and transparency failures - Sypher