Government action to ban social media platforms risks strengthening Big Tech’s grip on the industry further, limiting access for smaller players, an exec at BlueSky has warned.

Rose Wang, Bluesky’s chief operating officer, told CNBC on the sidelines of SXSW in London on Wednesday that the smaller open-source platform isn’t opposed to regulation but that smaller players in the industry should be protected.

“I support the protection and the safety of youth, the question that we have then is at what cost, because essentially what I’m scared of is in the long term, we’re headed to a world where there’s about three to five platforms, and extreme heavy regulation of those platforms, and basically the whole compliance teams of these platforms are 10 times the size of our entire team,” Wang said.

“So, basically, we’re living in a world where it’s almost impossible for smaller entrants to come in and build healthier spaces,” she added.

The open-source platform was created within X, formerly known as Twitter, in 2019 and endorsed by Twitter co-founder Jack Dorsey. Bluesky spun off in 2021 and soon after gained prominence as a rival to the Elon Musk-owned platform. It’s since grown to 43 million users as of March, which is still only around 10% of X’s estimated 450 million users.

Bluesky has struggled to maintain popularity, and by the end of October last year, it had reportedly seen a 40% drop in daily mobile active users over the past 12 months. Wang said the company has around 40 employees.

“These platforms have led to a place where the bottom line is the thing that drives what they do… so I understand why governments have to step in and regulate, because the platforms have done nothing right,” Wang explained.

While governments say they’re looking to protect young people, tech firms have pushed back, arguing that the measures won’t necessarily prevent teens from seeing harmful content and will ultimately cut off teens from friends and community.

Australia was the first to enforce a blanket social media ban for teens under the age of 16-years-old in December, with major social media platforms like Meta’s Instagram, ByteDance’s TikTok, Alphabet’s YouTube, Elon Musk’s X, and Reddit forced to implement age verification methods such as facial estimation through selfies, uploaded ID documents, or linked bank details.

Fines for not complying can reach up to 49.5 million Australian dollars ($35 million) if they fail to take “reasonable steps” to comply. Bluesky also introduced age assurance checks to keep under-16s off its platform, according to Australia’s eSafety Commissioner.

Australia’s ban set a precedent, with several countries worldwide looking to propose similar legislation, including the U.K., Spain, France, and Austria. In the U.S., state-level legislation is looking more likely than a national ban.

“I just want to end here with not saying that regulation is bad; it’s that regulation needs to work together with innovation,” Wang said.

“I think that there needs to be basically more channels between the smaller, medium-sized players and small businesses with regulators, because they need to be protected, while also then the very Big tech players who we know are circumventing regulation need to be regulated, and so I think that nuance can be struck.”

Governments around the world are making efforts to crack down on teen social media use amid mounting evidence of potential harms, but critics argue blanket bans are an ineffective quick fix.

Australia became the first country to enforce a sweeping social media ban for under-16s in December, requiring platforms like Meta’s Instagram, ByteDance’s TikTok, Alphabet’s YouTube, Elon Musk’s X, and Reddit to implement age verification measures or face penalties.

Several European countries are now looking to follow Australia’s lead, with the U.K., Spain, France, and Austria drafting their own proposals. Although a national ban in the U.S. looks unlikely, state-level legislation is underway.

It comes after Meta, the parent company of Facebook, Instagram and Threads, faced two separate defeats in trials related to child safety and social media harms in March.

A Santa Fe jury found Meta misled users about child safety on its apps. The next day, a Los Angeles jury ruled that Meta and YouTube designed platform features that contributed to a plaintiff’s mental health harms.

These developments are set to “unleash a lot more legislation,” Sonia Livingstone, social psychology professor and director of the London School of Economics’ Digital Futures for Children center, told CNBC.

However, Livingstone said a social media ban for teens is a slapdash solution from governments that have failed to properly police tech giants for years.

“I think the argument for a ban is an admission of failure that we cannot regulate companies, so we can only restrict children,” she said, explaining that the U.S. and Europe already have a lot of legislation in the books that isn’t being enforced.

“When are governments really going to enforce, raise the stakes on fines, ban the companies if necessary for not complying,” she added.

Many Australian teens flouted the social media ban when it first came into force in December. A BBC report found that downloads of VPNs, which hide users’ locations to avoid country-specific restrictions, increased before the ban.

Additionally, downloads of some apps that weren’t yet affected such as Lemon8, Yope and Discord also surged in the days after the law came into effect, per the report.

“I think it [a ban] certainly gets rid of all the harmful aspects, but it gets rid of the good ones too and I’m just not yet sure if that’s proportionate,” Nash added.

U.K. regulators are calling on social media giants to enforce stricter protection for children on their platforms after a blanket ban for under-16s was rejected by lawmakers.

Online safety organizations Ofcom and the Information Commissioner’s Office said they had written to YouTube, TikTok, Facebook, Instagram, and Snapchat on Thursday, urging them to tackle a broad range of child safety issues, from implementing stringent age verification measures to tackling child grooming on their platforms.

It comes after U.K. lawmakers voted against a proposal to include a social media ban for under-16s in the a piece of child welfare legislation being debated earlier this month.

The U.K. government has launched a consultation on children’s social media use to gather views of parents and young people on whether a social media ban would be effective.

Governments across Europe are weighing stricter regulations to limit teens’ use of social media after Australia became the first country to enforce a sweeping ban for under-16s in December. Spain, France, and Denmark are among the countries weighing similar measures.

TikTok says its rolled out enhanced technologies across Europe since January to detect and remove accounts that belong to anyone under its minimum age requirement of 13, with the help of specialist moderators.

It also utilizes facial age estimation, credit card authorization, or government-approved identification to confirm users’ ages, the company said.

Snapchat is investing and working on its safety efforts, a spokesperson from the company told CNBC in emailed comments.

“We strongly support app store-level age verification – a consistent, industry-wide solution applied at the point of download, rather than patchwork checks by individual platforms,” they added.

YouTube did not immediately respond to requests for comment from CNBC.

Meta CEO Mark Zuckerberg said in Wednesday court testimony that he reached out to Apple CEO Tim Cook to discuss the “wellbeing of teens and kids.”

The comments came after defense lawyer Paul Schmidt pointed to an email exchange between Zuckerberg and Cook from February 2018. “I thought there were opportunities that our company and Apple could be doing and I wanted to talk to Tim about that,” Zuckerberg said.

The email exchange was part of a broader portrayal by the defense attorney to show jury members that Zuckerberg was more proactive about the safety of young Instagram users than what was previously presented to court by the opposing counsel, going so far as to reach out to a corporate rival.

“I care about the wellbeing of teens and kids who are using our services,” Zuckerberg said when characterizing some of the content of the email.

Zuckerberg testified during a landmark trial in Los Angeles Superior Court over the question of social media and safety, which is being likened to the industry’s “Big Tobacco” moment.

Part of the trial focused on the alleged harms of certain digital filters promoting cosmetic surgery, which Instagram chief Adam Mosseri previously testified about earlier in the trial.

Zuckerberg said the company consulted with various stakeholders about the use of beauty filters on Instagram, but he did not specifically name them. The plaintiff’s lawyer questioned Zuckerberg about messages showing he lifted the ban because it was “paternalistic.”

“It sounds like something I would say and something I feel,” Zuckerberg replied. “It feels a little overbearing.”

Zuckerberg was pressed about the decision to allow the feature when the company had guidance from experts that the beauty filters had negative effects, particularly on young girls.

He was specifically asked about one study by the University of Chicago in which 18 experts said that beauty filters as a feature cause harm to teenage girls.

Zuckerberg, who noted that he believed this was referring to so-called cosmetic surgery filters, said he saw that feedback and discussed with the team, and it came down to free expression. “I genuinely want to err on the side of giving people the ability to express themselves,” Zuckerberg said.

Zuckerberg echoed Mosseri’s previous sentiments shared in court that Meta ultimately decided to lift a temporary ban on the plastic surgery digital filters without promoting them to other users.

Defense attorney Mark Lanier noted that Facebook’s vice president of product design and responsible innovation, Margaret Stewart, said in an email that while she would support Zuckerberg’s ultimate decision, she said she didn’t believe it was the “right call given the risks.” Stewart mentioned in her message that she dealt with a personal family situation that she acknowledged made her biased, but gives her “first-hand knowledge” of the alleged harms.

Zuckerberg said that many Meta employees disagree with the company’s decisions, which is something the company encourages, and while he understood Stewart’s perspective, there was ultimately not enough causal evidence to support the assertion of harms by the outside experts.

When Lanier asked if Zuckerberg has a college degree that would indicate expertise in causation, the Meta chief said, “I don’t have a college degree in anything.”

“I agree I do not know the legal understanding of causation, but I think I have a pretty good idea of how statistics work,” Zuckerberg said.

The trial, which began in late January, centers on a young woman who alleged that she became addicted to social media and video streaming apps like Instagram and YouTube.

The Facebook founder pushed back against the notion that the social media company made increasing time spent on Instagram a company goal.

Zuckerberg was addressing a 2015 email thread in which he appeared to highlight improving engagement metrics as an urgent matter for the company.

While the email chain may have contained the words “company goals,” Zuckerberg said the comments could have been an aspiration, and asserted that Meta doesn’t have those objectives.

Lawyers later brought up evidence from Mosseri, which included goals to actively up user daily engagement time on the platform to 40 minutes in 2023 and to 46 minutes in 2026.

Zuckerberg said the company uses milestones internally to measure against competitors and “deliver the results we want to see.” He asserted that the company is building services to help people connect.

Lawyers also raised questions over whether the company has taken adequate steps to remove underage users from its platform.

Zuckerberg said during his testimony that some users lie about their age when signing up for Instagram, which requires users to be 13 or older. Lawyers also shared a document which stated that 4 million kids under 13 used the platform in the U.S.

The Facebook founder said the company removes all underage users it identifies and includes terms about age usage during the sign-up process.

“You expect a 9-year-old to read all of the fine print,” a lawyer for the plaintiff questioned. “That’s your basis for swearing under oath that children under 13 are not allowed?”

Instagram did not begin requiring birthdays at sign-up until late 2019. At several times, Zuckerberg brought up his belief that age verification is better suited for companies like Apple and Google, which maintain mobile operating systems and app stores.

Zuckerberg later responded to questions about documents in which the company reported a higher retention rate on its platform for users who join as tweens. He said that lawyers were “mischaracterizing” his words and that Meta doesn’t always launch products in development such as an Instagram app for users under 13.

During Wednesday’s session, Judge Carolyn B. Kuhl threatened to hold anyone using AI smart glasses during Zuckerberg’s testimony in contempt of court.

“If you have done that, you must delete that, or you will be held in contempt of the court,” the judge said. “This is very serious.”

Members of the team escorting Zuckerberg into the building just before noon ET were pictured wearing the Meta Ray-Ban artificial intelligence glasses.

Recording is not allowed in the courtroom.

Lawyers also questioned whether Zuckerberg previously lied about the board’s inability to fire him.

“If the board wants to fire me, I could elect a new board and reinstate myself,” he said, in response to remarks he previously made on Joe Rogan’s podcast.

During his interview with the podcaster last year, Zuckerberg had said he wasn’t worried about losing his job because he holds voting power.

Zuckerberg told the courtroom he is “very bad” at media.

Lawyers representing the plaintiff contend that Meta, YouTube, TikTok and Snap misled the public about the safety of their services and knew that the design of their apps and certain features caused mental health harms to young users.

Snap and TikTok settled with the plaintiff involved in the case before the trial began.

Meta has denied the allegations and a spokesperson told CNBC in a statement that “the question for the jury in Los Angeles is whether Instagram was a substantial factor in the plaintiff’s mental health struggles.”

Last week, Instagram’s Mosseri testified that while he thinks there can be problematic usage of social media, he doesn’t believe that’s the same as clinical addiction.

“So it’s a personal thing, but yeah, I do think it’s possible to use Instagram more than you feel good about,” Mosseri said. “Too much is relative, it’s personal.”

The Los Angeles trial is one of several major court cases taking place this year that experts have described as the social media industry’s “Big Tobacco” moment because of the alleged harm caused by their products and the related company efforts to deceive the public.

Meta is also involved in a major trial in New Mexico, in which the state’s attorney general, Raúl Torrez, alleges that the social media giant failed to ensure that children and young users are safe from online predators.

“What we are really alleging is that Meta has created a dangerous product, a product that enables not only the targeting of children, but the exploitation of children in virtual spaces and in the real world,” Torrez told CNBC’s “Squawk Box” last week when opening arguments for the trial began.

This summer, another social media trial is expected to begin in the Northern District of California. That trial also involves companies like Meta and YouTube and allegations that their respective apps contain flaws that foster detrimental mental health issues in young users.

— CNBC’s Jennifer Elias contributed reporting.

WATCH: New Mexico AG Raul Torrez talks about his case against Meta

Australia’s social media ban for under-16s has grabbed global attention, and governments worldwide are considering implementing similar policies, with the U.K. seen as likely to be next.

The Australian government’s Online Safety Amendment Act came into effect on December 10, and included major social media platforms including Reddit, X, Meta’s Instagram, Alphabet’s YouTube, Bytedance’s TikTok.

The platforms were forced to implement age verification methods to ensure under-16s are unable to create an account, and the companies can face fines up to 49.5 million Australian dollars ($32 million) for not complying.

Although teenagers, tech giants, and experts have had mixed reactions since the ban came into force, governments globally are drafting bills to implement an Australia-style ban.

“This is a global issue, and governments everywhere are under pressure to respond,” Daisy Greenwell, co-founder of U.K.-based Smartphone Free Childhood, told CNBC. SFC is a grassroots campaign urging parents to delay giving children smartphones and social media access.

“We’re already seeing countries move in this direction, and as confidence builds and evidence accumulates, more will follow. No one thinks the status quo is working for children, parents, or society – and this is one of the clearest policy responses currently on the table,” Greenwell added.

Other countries that are considering an under-16s social media ban include the U.K., France, Denmark, Spain, Germany, Italy and Greece.

The U.S. is trailing behind on this front with a national ban being unlikely, however there is certainly state and local interest, according to Ravi Iyer, a managing director of the University of Southern California Marshall School’s Neely Center.

Iyer has worked closely with social psychologist Jonathon Haidt who wrote the renowned book The Anxious Generation, about the harmful impacts of social media and smartphones on children and teens.

“It’s really hard to predict Federal policy, but it is one of the few bipartisan issues left, so it certainly is possible,” Iyer said in emailed comments.

“I’m more confident at the state level and I believe we will see a few U.S. states enact such a policy in the next couple years.”

Lawmakers in California and Texas are looking at bringing in state-level bans in 2026.

But governments looking to implement such bans could face resistance from the tech giants.

Following Australia’s move, community-focused forum Reddit launched a lawsuit, arguing that the new law goes too far by restricting political discussion online. Facebook and Instagram owner Meta urged Canberra to reconsider the ban. And in a statement to users explaining how the restrictions work, Elon Musk’s X said: “It’s not our choice – it’s what the Australian law requires.”

Meanwhile, calls for a social media ban for under-16s in the U.K. have grown rapidly at the beginning of this year. The U.K.’s House of Lords is expected to vote this week to amend the Children’s Wellbeing and Schools Bill to include a social media ban for under-16s.

Greenwell’s SFC launched an email campaign this week, which saw more than 100,000 emails sent to local U.K. lawmakers. The SFC template email urged the government to set “reasonable, age-appropriate boundaries that protect children’s wellbeing.”

“We consistently see that the more time children spend on smartphones and social media, the worse their mental health outcomes tend to be. If these platforms are no longer available, the network effects collapse – and young people can reconnect with each other and with the real world,” Greenwell told CNBC.

U.K. Prime Minister Keir Starmer has even backed the idea saying “we need to better protect children from social media” and that he’s studying Australia’s ban.

“All options are on the table in relation to what further protections we can put in place – whether that’s under-16s on social media or an issue I am very concerned about, under fives and screen time,” Starmer said last week.

“Children are turning up age four at reception [the first year of school] having spent far too much time on screens,” he added.

Meanwhile, U.K. health secretary Wes Streeting asked The Anxious Generation author Haidt to address his officials at an event to push for stricter limits on young people.

France is also a strong contender as it debates two bills, one backed by French President Emmanuel Macron, to prevent social media access for under 15s, France24 reported last week. France’s public health watchdog ANSES outlined that social media’s negative effects are “numerous” and well documented.

USC’s Iyer said that if a teen ban becomes a global norm, it alleviates the pressure on young people to self-police.

“One of the primary goals of the law is to change the norm, such that teens don’t feel pressure to use social media because all their friends are doing so” Iyer said.

“It’s not really a realistic choice to abstain if you feel that all your friends are using a particular platform. If we can solve that problem and the majority of teens are off of social media, we’ll have done a lot of good,” he added.

Australia on Wednesday became the first country to formally bar users under the age of 16 from accessing major social media platforms, a move expected to be closely monitored by global tech companies and policymakers around the world.

Canberra’s ban, which came into effect from midnight local time, targets 10 major services, including Alphabet‘s YouTube, Meta’s Instagram, ByteDance’s TikTok, Reddit, Snapchat and Elon Musk’s X.

The controversial rule requires these platforms to take “reasonable steps” to prevent underage access, using age–verification methods such as inference from online activity, facial estimation via selfies, uploaded IDs, or linked bank details.

All targeted platforms had agreed to comply with the policy to some extent. Elon Musk’s X had been one of the last holdouts, but signaled on Wednesday that it would comply. 

The policy means millions of Australian children are expected to have lost access to their social accounts. 

However, the impact of the policy could be even wider, as it will set a benchmark for other governments considering teen social media bans, including Denmark, Norway, France, Spain, Malaysia and New Zealand. 

Ahead of the legislation’s passage last year, a YouGov survey found that 77% of Australians backed the under-16 social media ban. Still, the rollout has faced some resistance since becoming law.

Supporters of the bill have argued it safeguards children from social media-linked harms, including cyberbullying, mental health issues, and exposure to predators and pornography. 

Among those welcoming the official ban on Wednesday was Jonathan Haidt, social psychologist and author of The Anxious Generation, a 2024 best-selling book that linked a growing mental health crisis to smartphone and social media usage, especially for the young.

In a post on social media platform X, Haidt commended policymakers in Australia for “freeing kids under 16 from the social media trap.”

“There will surely be difficulties in the early months, but the world is rooting for your success, and many other nations will follow,” he added. 

On the other hand, opponents contend that the ban infringes on freedoms of expression and access to information, raises privacy concerns through invasive age verification, and represents excessive government intervention that undermines parental responsibility.

Those critics include groups like Amnesty Tech, which said in a statement Tuesday that the ban was an ineffective fix that ignored the rights and realities of younger generations.

“The most effective way to protect children and young people online is by protecting all social media users through better regulation, stronger data protection laws and better platform design,” said Amnesty Tech Programme Director Damini Satija.

Meanwhile, David Inserra, a fellow for free expression and technology at the Cato Institute, warned in a blog post that children would evade the new policy by shifting to new platforms, private apps like Telegram, or VPNs, driving them to “more isolated communities and platforms with fewer protections” where monitoring is harder.

Tech companies like Google have also warned that the policy could be extremely difficult to enforce, while government-commissioned reports have pointed to inaccuracies in age–verification technology, such as selfie-based age–guessing software. 

Indeed, on Wednesday, local reports in Australia indicated that many children had already bypassed the ban, with age-assurance tools misclassifying users, and workarounds such as VPNs proving effective.

However, Australian Prime Minister Anthony Albanese had attempted to preempt these issues, acknowledging in an opinion piece on Sunday that the system would not work flawlessly from the start, likening it to liquor laws.

“The fact that teenagers occasionally find a way to have a drink doesn’t diminish the value of having a clear national standard,” he added.

Experts told CNBC that the rollout is expected to continue to face challenges and that regulators would need to take a trial-and-error approach. 

“There’s a fair amount of teething problems around it. Many young people have been posting on TikTok that they successfully evaded the age limitations and that’s to be expected,” said Terry Flew, a professor of digital communication and culture at the University of Sydney. 

“You were never going to get 100% disappearance of every person under the age of 16 from every one of the designated platforms on day one,” he added.

TikTok’s grip on the short-form video market is tightening, and the world’s biggest tech platforms are racing to catch up.

Since launching globally in 2016, ByteDance-owned TikTok has amassed over 1.12 billion monthly active users worldwide, according to Backlinko. American users spend an average of 108 minutes per day on the app, according to Apptoptia.

TikTok’s success has reshaped the social media landscape, forcing competitors like Meta and Google to pivot their strategies around short-form video. But so far, experts say that none have matched TikTok’s algorithmic precision.

“It is the center of the internet for young people,” said Jasmine Enberg, vice president and principal analyst at Emarketer. “It’s where they go for entertainment, news, trends, even shopping. TikTok sets the tone for everyone else.”

Platforms like Meta‘s Instagram Reels and Google’s YouTube Shorts have expanded aggressively, launching new features, creator tools and even considering separate apps just to compete. Microsoft-owned LinkedIn, traditionally a professional networking site, is the latest to experiment with TikTok-style feeds. But with TikTok continuing to evolve, adding features like e-commerce integrations and longer videos, the question remains whether rivals can keep up.

“I’m scrolling every single day. I doom scroll all the time,” said TikTok content creator Alyssa McKay.

But there may a dark side to this growth.

As short-form content consumption soars, experts warn about shrinking attention spans and rising mental-health concerns, particularly among younger users. Researchers like Dr. Yann Poncin, associate professor at the Child Study Center at Yale University, point to disrupted sleep patterns and increased anxiety levels tied to endless scrolling habits.

“Infinite scrolling and short-form video are designed to capture your attention in short bursts,” Dr. Poncin said. “In the past, entertainment was about taking you on a journey through a show or story. Now, it’s about locking you in for just a few seconds, just enough to feed you the next thing the algorithm knows you’ll like.”

Despite sky-high engagement, monetizing short videos remains an uphill battle. Unlike long-form YouTube content, where ads can be inserted throughout, short clips offer limited space for advertisers. Creators, too, are feeling the squeeze.

“It’s never been easier to go viral,” said Enberg. “But it’s never been harder to turn that virality into a sustainable business.”

Last year, TikTok generated an estimated $23.6 billion in ad revenues, according to Oberlo, but even with this growth, many creators still make just a few dollars per million views. YouTube Shorts pays roughly four cents per 1,000 views, which is less than its long-form counterpart. Meanwhile, Instagram has leaned into brand partnerships and emerging tools like “Trial Reels,” which allow creators to experiment with content by initially sharing videos only with non-followers, giving them a low-risk way to test new formats or ideas before deciding whether to share with their full audience. But Meta told CNBC that monetizing Reels remains a work in progress.

While lawmakers scrutinize TikTok’s Chinese ownership and explore potential bans, competitors see a window of opportunity. Meta and YouTube are poised to capture up to 50% of reallocated ad dollars if TikTok faces restrictions in the U.S., according to eMarketer.

Watch the video to understand how TikTok’s rise sparked a short form video race.