Under-16 social media ban could reduce tech profitsCredit: Shutterstock, Vasin Lee
Following Australia’s monumental decision to ban social media to those under 16, other governments are considering following in their footsteps. However, this ban affects more than just the teenagers as big tech companies will feel their absence acutely.
The business model behind social media profits
With the rise of the internet came the rise of digital marketing. Billboards were ditched for pop up ads and sponsored content. In 2025 Meta, Facebook and Instagram’s parent company, generated €171.69 billion in revenue. Of that amount, 98 per cent came from advertising alone, totalling €167.53 billion.
Such figures highlight how dependent social media platforms are on consistent user engagement and advertising impressions.
The value of user data
Beyond advertising revenue, tech companies also profit from collecting users’ data. The economic value of customer data reached €2.3 billion in 2024, and could reach €11 billion by 2032.
Using social media is such a lucrative endeavour for companies that they purposefully design addictive algorithms to keep users scrolling. While users chat and share funny animal videos, big tech companies collect their data and weaponise it against them, feeding them advertisements in accordance to that data.
Every like, share and pause contributes to a detailed consumer profile. The younger the user, the more extensive the eventual profile.
How a social media ban impacts advertising revenue
While governments have implemented safeguards for children, removing under-16s would still result in a significant loss in data traffic and ad impressions.
The European Parliament notes that 97 per cent of young people use the internet daily. Additionally, 78 per cent of people aged 13 to 17 check their devices, particularly their social media apps, every hour.
Banning under-16s would therefor remove a large portion of the audience these advertisements are targeted towards. Companies could lose billions from the reduced number of online users, especially in key US an EU markets.
The call to ban social media for under-16s may prioritise child safety, but it also challenges the foundations of the digital advertising economy. If approved, big tech companies could face declining user data streams, reduced engagement metrics and substantial revenue losses, proving that teenage users are far more valuable to the social media business model than many might assume.
