Social media companies will increasingly be under scrutiny this year.
Social media platforms across the globe may see intensified regulation in 2025, amid an anticipated shift in how governments deal with big tech.
This is one of the key findings of GlobalData’s latest Strategic Intelligence report on social media.
It reveals that regulatory pressure on social media started intensifying in 2024, as governments paid more attention to social media companies’ governance, risk and compliance processes and business practices.
This year may see more severe legislation as Australia’s move to ban social media for those under the age of 16 takes effect, while the UK considers banning smartphones in schools. It may also witness the outcome of Google’s second anti-trust lawsuit regarding digital advertising, which could pave the way for more anti-trust legislation against big tech companies, notes the report.
The upcoming laws and new anti-trust scrutiny could reshape the sector’s structure and revenue models. As users grow wary of data use and moderation policies, smaller decentralised platforms are expected to attract more attention in 2025, says GlobalData.
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 increasingly be under scrutiny.”
Business models transform
Smaller, more disparate networks may increase in popularity this year, according to Global Data.
Decentralised social media platforms are emerging as alternatives to traditional, centralised platforms, offering advantages in data privacy, user control and resilience.
Several smaller social networks − such as BlueSky, Damus, Threads and Mastodon − have entered the market following regulatory scrutiny of large social media companies’ business practices and users’ desire for more intimate engagement.
These all offer a decentralised social network experience with features focusing on user control, privacy and a community-driven approach.
They are centred on a “fediverse approach” − a collection of community-owned, ad-free, decentralised and privacy-centric social networks.
The regulatory crackdown on monopolistic behaviour 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 into a super-app to diversify revenue streams away from personalised ads. Consumers’ increased concern about the use of personal data and content moderation will instead see smaller decentralised apps (dApps) become more popular, says GlobalData.
Umaru adds: “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.”
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.
“With regulatory upsets and new geopolitical upheavals to consider, social media companies must prioritise revenue diversification. This will ensure they remain competitive within an evolving landscape,” Umaru concludes.
