Analysis: Regulation Can Strengthen Large Social Platforms

Regulation can advantage incumbent and large social platforms even when it was not designed to help them. Large companies can influence rulemaking through lobbyists, Washington offices, PACs and other political vehicles, while also having more resources to absorb compliance costs.

Age verification illustrates the burden: Lucy is described as paying about $1 for each checkout involving nicotine products. At one point, a $50 average order would have put roughly 2% of revenue toward that requirement; larger companies may have more ways to absorb or offset such costs.

The analysis says social media companies did not ask for this regulatory outcome, but may still benefit from it. The effect on Meta’s stock was described inconsistently—as roughly flat through the developments and, in a separate remark, as having risen after the news—so the market impact remains uncertain.