1. EU Commission is reviewing Snapchat's safeguards for minors under the Digital Services Act. 2. This scrutiny could lead to regulatory changes impacting SNAP's operations and compliance.
Increased regulatory scrutiny can lead to operational costs and potential fines, similar to past cases with Facebook's privacy issues that negatively impacted investor sentiment.
Regulatory changes can significantly impact operational costs and growth, making this a critical issue for SNAP shareholders.
Initial scrutiny may prompt immediate investor concerns regarding compliance costs and potential operational disruptions, affecting SNAP's stock in the near term.