Regulatory pressure on social media intensified in 2024, signalling a shift in how governments deal with Big Tech. The upcoming laws such as Australia’s under-16 ban and new antitrust scrutiny could reshape the sector’s structure and revenue models. As users grow wary of data use and moderation policies, smaller decentralized platforms are expected to attract more attention in 2025.
Reportedly, the US Department of Justice’s victory over Google in its antitrust lawsuit, the postponed ban of TikTok in the US, and the arrest of Telegram CEO Pavel Durov signaled the end of an era for social media companies. The perceived leniency afforded to them by regulators has been replaced by unprecedentedly stringent rulings.
GlobalData’s latest Strategic Intelligence report, “Social Media,” reveals that 2025 may see more severe legislation as Australia’s move to ban social media for those under 16 takes effect while the UK considers banning smartphones in schools. The year may also witness the outcome of Google’s second antitrust lawsuit regarding digital advertising, which could pave the way for more antitrust legislation against Big Tech companies.
Aisha U-K Umaru, Strategic Intelligence Analyst at GlobalData, comments: “We are seeing the tides shift for social media companies as more comprehensive data privacy and consumer protection laws take shape. With immense reach and influence, social media companies will be increasingly under scrutiny.”
Smaller, more disparate networks may increase in popularity
Several smaller social networks, such as BlueSky, Damus, and Mastodon, have entered the market following regulatory scrutiny of large social media companies’ business practices and users’ desire for more intimate engagement. The regulatory crackdown on monopolistic behavior means the super-app model pioneered by Tencent in China is unlikely to be as successful in the West.
Consumer demand will also impact the attempts to build pools of connected apps, such as Elon Musk’s bid to transform X (formerly Twitter) into a super-app to diversify revenue streams away from personalized ads. Consumers’ increased concern about the use of personal data and content moderation will instead see smaller decentralized apps (dApps) become more popular.
Umaru continues: “New entrants to the industry may be able to carve out a niche within areas such as the dApps market. The industry, dominated by behemoths such as Meta and Alphabet, may therefore start to see more diversification, and it will be interesting to see the response of the incumbents.”
Business models are changing
Social media companies have already begun diversifying their revenue streams in the face of the threats to their ad-focused models. X and Snap have introduced paid subscription options. TikTok has invested in e-commerce and gaming on its platform, and Meta placed its bet on the metaverse.
Umaru concludes: “With regulatory upsets and new geopolitical upheavals to consider, social media companies must prioritize revenue diversification. This will ensure that they remain competitive within an evolving landscape.”
