Social media giants are facing increased regulatory pressure and a growing user shift toward decentralized platforms, according to a new report from GlobalData. The year 2024 saw a significant tightening of government scrutiny on Big Tech, with upcoming legislation like Australia’s under-16 social media ban and heightened antitrust investigations poised to reshape the industry.
GlobalData’s analysis indicates that users, increasingly concerned about data privacy and content moderation, are turning to smaller, decentralized social networks like BlueSky, Damus, and Mastodon. This trend is expected to accelerate in 2025.
“We are seeing the tides shift for social media companies as more comprehensive data privacy and consumer protection laws take shape,” said Aisha U-K Umaru, Strategic Intelligence Analyst at GlobalData. “With immense reach and influence, social media companies will be increasingly under scrutiny.”
Recent legal actions, including the US Department of Justice’s victory over Google in its antitrust lawsuit and the postponed TikTok ban in the US, signal a move away from the perceived leniency previously afforded to tech giants. Furthermore, ongoing antitrust lawsuits and potential new legislation, such as the UK’s consideration of smartphone bans in schools, could further disrupt the sector.
The report suggests that the “super-app” model, popularized by Tencent in China, may struggle to gain traction in the West due to regulatory crackdowns and consumer preferences. Instead, decentralized applications (dApps) are expected to rise in popularity, driven by user demand for greater control over their data and content.
In response to these challenges, social media companies are diversifying their revenue streams. X (formerly Twitter) and Snap have introduced subscription models, while TikTok has expanded into e-commerce and gaming. Meta’s investment in the metaverse represents another attempt to move beyond traditional advertising-reliant business models.
“With regulatory upsets and new geopolitical upheavals to consider, social media companies must prioritize revenue diversification,” Umaru concluded. “This will ensure that they remain competitive within an evolving landscape.”