SNAP Stock Is Down 10% Today – Why Is the European Commission Investigating Co?

• The EU said that it will now carry out an in-depth investigation.
• The Commission suspects that Snapchat's default settings do not provide sufficient privacy, safety, and security protections for minors. 
• It also suspects that Snapchat is in breach of DSA rule under which online platforms must mitigate systemic risks stemming from their service.

Snap stock fell 10% after the European Commission on Thursday said that it has opened formal proceedings to investigate if Snapchat is ensuring a high level of safety, privacy and security for children online, in compliance with the Digital Services Act (DSA).

The EU said that Snapchat may have breached the DSA by exposing minors to grooming attempts and recruitment for criminal purposes, as well as to information about the sale of illegal goods, like drugs, or age-restricted products, such as vapes and alcohol. 

Inadequate default account settings

The Commission suspects that Snapchat's default settings do not provide sufficient privacy, safety, and security protections for minors. 

It also suspects that Snapchat is in breach of DSA rule under which online platforms must mitigate systemic risks stemming from their service. “Moreover, the platform does not seem to effectively prevent users, including children and teens, from accessing such content,” EU said in a statement. 

Next steps

The EU said that it will now carry out an in-depth investigation. This involves gathering further evidence, including by sending requests for information to Snapchat and conducting interviews or inspections. 

The opening of formal proceedings empowers the Commission to take further enforcement steps, such as adopting interim measures and a non-compliance decision. The Commission is also empowered to accept commitments from Snapchat to remedy the issue raised in the proceedings.

“Today's opening of formal proceedings means that the Commission takes charge of the investigation that the Dutch Digital Service Coordinator (DSC), Authority for Consumers and Markets (ACM), launched on 9 September 2025 into the sales of vapes to minors on Snapchat. ACM will be associated to the Commission's investigation and will continue to support it,” EU said. 

How Did Retail Traders React?

Retail sentiment around SNAP trended in ‘bullish’ territory amid ‘high’ message volume. 

Shares in the company have fallen 51% so far this year. 

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