EU widens Digital Services probe into Meta over minors

The European Commission is preparing preliminary findings that would expand a Digital Services Act investigation into whether Facebook and Instagram use design features and recommendation systems that keep younger users engaged for long periods. The probe was opened in May 2024 and focuses on elements that may create a so-called “rabbit‑hole effect.”

Preliminary findings are a formal step in the DSA process but are not a final ruling. Under the procedure, Meta will have an opportunity to respond to the Commission’s concerns and propose remedies. If regulators determine the company has breached the law and it does not correct the issues, fines of up to 6% of annual global revenue are possible.

The inquiry will examine whether platform design and recommendation algorithms disproportionately retain minors or expose them to harmful or inappropriate material. In April the Commission found preliminary evidence that Meta had failed to prevent children under 13 from accessing Facebook and Instagram, saying current safeguards do not reliably stop underage accounts from being created or ensure their quick removal.

Regulators are also scrutinizing how platforms verify users’ ages, how account safeguards operate in practice, and whether product features steer minors into prolonged usage. The Digital Services Act requires large online platforms to assess and mitigate systemic risks to the rights and safety of minors and to reduce exposure to harmful content.

Separately, Meta agreed to invest $900 million in Bengaluru‑based fintech startup CRED as part of the company’s Series H funding round. The transaction gives Meta an approximate 20% minority stake. The funding round will raise ₹8,550 crore and values CRED at a post‑money valuation of ₹43,239 crore. The deal includes both primary and secondary share purchases.

CRED stated that Meta will join its cap table as a minority investor and will not gain access to customer data. CRED added that the investment will support product and market expansion plans.

The Commission has not announced a timeline for its next formal steps in the DSA probe. Meta’s response to any preliminary findings will form part of the official process before a final decision or any sanction is taken.