Snap To Roll Out Age Checks In Australia This Week As New Law Blocks Under-16 Users From Social Media

• The new Australian law requires the lockdown of all users' accounts under 16 years, beginning Dec. 10. 
• Snap said it strongly disagrees with Australia’s assessment.
• Snap stock has lost nearly 30% this year as the company faces competitive pressure, challenges with ad platform monetization, and an inability to achieve profitability.

Snapchat parent Snap, Inc. (SNAP) will start verifying users’ ages in Australia this week, following the local government’s decision to ban social usage for users aged 16 years or under.

Snap stock has lost nearly 30% this year, as the social media company suffers from competitive pressure, challenges with ad platform monetization and the inability to achieve profitability.

Regulatory Setback

In a statement released on Saturday, the company said its users will be prompted to tap ‘Verify Your Age,’ and that the age can be verified through a connection with the Australian bank account, or with a government-issued identification card, or by taking a selfie, which its third-party service provider would use to estimate an age range.

The move was to comply with Australia’s “Social Media Minimum Age Act,” which restricts the use of platforms it deems social media to those 16 years of age or older. The government has classified Snapchat as an “Age-Restricted Social Media Platform.

The new law requires the lockdown of all users' accounts under 16 years, beginning Dec. 10. 

Snap Disagrees

Communicating its view, Snap said it strongly disagrees with Australia’s assessment, contending that it has always been a visual messaging app that connects its community with its closest friends and family. 

However, Snap said it will comply with the new regulation, as it always does with local laws in the countries where it operates. “However, disconnecting teens from their friends and family doesn’t make them safer — it may push them to less safe, less private messaging apps,” the company said. “We continue to advocate for more privacy-conscious solutions, such as mandating age verification at the device, operating system, or app store level.”

Why It’s Important

Snap’s shares received a boost earlier this month from the company’s announcement of a deal with artificial intelligence (AI) startup Perplexity and its better-than-expected third-quarter results.

According to Global Statistics, the 13-17-year age group accounted for roughly 18% of its total user base globally. 

Snap stock is seen up about 1% in overnight hours, according to Yahoo Finance. The stock bucked the broader market's Friday uptrend, ending the session down 1.16% at $7.69. Retail sentiment toward the stock among Stocktwits users remained ‘bearish,’ and the message volume was ‘extremely low.’

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