Analysis of the Impact of Global Social Media Regulation on User Growth and Advertising Revenue of Tencent and Meta

Based on collected data and in-depth analysis, I will provide you with a comprehensive research report.

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On December 10, 2024, Australia’s social media ban for individuals under the age of 16 officially took effect, marking the first initiative worldwide to implement such a minimum age limit for social media through legislation [1][2]. Under the regulation, 10 major social media platforms including Facebook, TikTok, X, YouTube, and Snapchat must take “reasonable measures” to prevent minors under 16 from having accounts on their platforms. Non-compliant enterprises will face a maximum fine of approximately 49.5 million Australian dollars (about 33 million US dollars) [1][3].

• In the first month after the ban took effect, social media platforms have closed approximately
  4.7 million
  related accounts in total [3]
• TikTok suspended approximately
  200,000
  accounts on the first day the ban took effect [1]
• Meta began closing underage accounts in Australia starting from early December 2025, stating it had closed approximately
  550,000
  underage accounts across Instagram, Facebook, and Threads [3]
• Among Australian teenagers aged 10-15, 96% use social media, 70% have been exposed to harmful content, and more than half have experienced cyberbullying [1][2]

In addition to Australia, multiple countries have already implemented or are considering similar measures:

Country/Region	Policy Content	Effective Date	Maximum Fine
Australia	Under-16 Ban	December 2025	49.5 million AUD
Denmark	Age Limit Raised to 15	December 2024	10 million DKK
Malaysia	Parental Supervision Required for Under-16s	January 2026	5 million MYR
Utah, US	Parental Consent Required for Under-18s	March 2023	2.5 million USD
France	Discussing Lowering Age to 15	Under Discussion	To Be Determined

In addition, the EU’s Digital Markets Act (DMA) imposed a $200 million fine on Meta, warning that further regulatory changes could have a “material negative impact” on its European revenue [4].

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Based on the implementation intensity of regulatory policies and target user groups, we have constructed a user growth impact model:

Platform	Short-Term Impact	Long-Term Impact	Key Influencing Factors
Facebook	-2.5%	-1.0%	Core user base is relatively older, so the impact is relatively minor
Instagram	-1.8%	-0.8%	Higher proportion of young users, but strong brand loyalty
Overall Meta	-2.2%	-0.9%	Diversified platform portfolio spreads risks

Platform	Short-Term Impact	Long-Term Impact	Key Influencing Factors
WeChat	-1.5%	-0.5%	Powerful ecosystem, with social functions accounting for only part of its services
QQ	-3.0%	-1.5%	Relatively young user base with many alternatives
Overall Tencent	-1.8%	-0.7%	Complementary gaming and fintech businesses

According to the latest data [5][6]:

• Meta Family of Apps
  : Daily Active Users (DAU) grew from 3.26 billion in Q1 2024 to 3.38 billion in Q3 2025, demonstrating resilience
• Tencent WeChat
  : Monthly Active Users (MAU) remained at around 1.4 billion, firmly maintaining its position as China’s leading social media platform
• QQ Users
  : Showed a downward trend, falling from 550 million in Q1 2024 to 470 million in Q3 2025

Tighter regulation is not the main cause of user loss; instead, the changes are more reflected in:

1. User Generational Shift
   : Younger users migrating to new platforms
2. Short-Video Competition
   : Platforms such as TikTok diverting user attention
3. Platform Function Evolution
   : Social functions being replaced by other services

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The impact of regulation on advertising revenue is mainly transmitted through the following pathway:

Regulatory Policies → Decline in User Scale → Reduction in Ad Impressions → Shift in Advertiser Budgets → Revenue Decline

Company	User-Related Advertising Revenue Loss	Estimated Proportion	Absolute Loss (USD 100 million)
Meta	-3.0%	Annual total advertising revenue ~USD 100 billion	-30
Tencent	-2.5%	Annual total advertising revenue ~USD 20 billion	-5

Company	User-Related Advertising Revenue Loss	Estimated Proportion	Absolute Loss (USD 100 million)
Meta	-1.2%	Annual total advertising revenue ~USD 120 billion	-14
Tencent	-1.0%	Annual total advertising revenue ~USD 25 billion	-2.5

Based on the latest financial report data [4][5][6]:

• Q3 2025 Revenue
  : USD 51.124 billion, representing a
  26%
  year-over-year increase
• Advertising Revenue Growth
  : 25.6% year-over-year, accelerating from Q2’s 21.5%
• Reels Annualized Revenue
  : Reached USD 50 billion, a 5x increase from USD 10 billion in Q2 2023
• Ad Impressions
  : 14% year-over-year increase, with pricing up 10%

: The impact of regulation is being offset by AI-driven advertising optimization. Meta’s AI recommendation system has significantly improved advertising ROI, enabling advertisers to increase their budgets even amid slower user growth.

Based on market data [7][8]:

• Q3 2025 Revenue Growth
  : 15%, with international gaming business growing 43%
• WeChat Advertising
  : Maintained growth relying on ecosystems such as Mini Programs and Channels
• AI Integration
  : Improved advertising delivery efficiency and precision

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Risk Category	Details	Impact Level
Compliance Risk	EU DMA, UK GDPR, U.S. state-level privacy laws	High
User Churn Risk	Younger users migrating to unregulated platforms	Medium
Advertiser Churn Risk	Budget shifts due to brand safety concerns	Medium
Increased Technical Costs	Development and maintenance of age verification systems	Low
Reputational Risk	Decline in market confidence caused by regulatory penalties	Medium

1. Age Verification Technology
   : Introduced government-issued ID verification and facial recognition
2. EU Compliance
   : Launched the “Less Personalized Ads” option [4]
3. AI Investment
   : 2025 capital expenditure increased to USD 70-72 billion [5]
4. Regional Differentiation
   : Adjusted product features for different jurisdictions

1. Ecosystem Enhancement
   : WeChat transformed from a single social platform to an integrated service platform
2. International Expansion
   : 43% growth in overseas gaming business hedges domestic risks [7]
3. AI Capability Building
   : Adjusted capital expenditure from RMB 13 billion in Q2 [8]
4. Compliance Investment
   : Cooperated with regulatory requirements in China and overseas

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Based on our analysis model, the financial impact of regulation on the two companies is as follows:

Indicator	Current Level	Short-Term Impact	Long-Term Impact	2026 Forecast
Revenue (USD 1 billion)	189.5	-5.7	-2.3	220-230
Operating Margin	43.2%	-1.5%	-0.5%	42-44%
Net Profit Margin	30.9%	-1.2%	-0.4%	30-32%

Indicator	Current Level	Short-Term Impact	Long-Term Impact	2026 Forecast
Revenue (USD 1 billion)	210.7	-5.3	-2.1	235-250
Operating Margin	31.8%	-0.8%	-0.3%	31-33%
Net Profit Margin	29.9%	-0.6%	-0.2%	29-31%

• Meta
  : Current price-to-earnings ratio (P/E) is 26.7x, and the market has partially priced in regulatory risks. The DCF model shows 22-39% upside potential [4]
• Tencent
  : Current P/E is 22.4x, and a 32% increase in dividends reflects management confidence [7]

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1. Limited but Significant Short-Term Shock
   : Regulation will cause Meta and Tencent’s user growth to slow by 1-3%, but both companies have large scales and strong user loyalty, so the overall impact is manageable.
2. Advertising Revenue Resilience Exceeds Expectations
   : AI-driven advertising optimization is offsetting the negative impact of slower user growth, with both companies maintaining over 20% growth in advertising revenue.
3. Long-Term Impact Gradually Absorbed
   : As regulation becomes normalized, users and advertisers will gradually adapt to the new rules, and the long-term impact will converge to around 1%.
4. Increased Industry Polarization
   : Regulation will accelerate industry consolidation, with leading platforms consolidating their positions relying on technological and resource advantages, while small and medium-sized platforms face greater pressure.

• Uncertainty in Regulatory Execution
  : Platforms such as Reddit are suing to challenge Australia’s ban [3], and legal battles may affect policy implementation
• Technical Circumvention Methods
  : VPNs and false age information may weaken regulatory effectiveness
• Geopolitical Risks
  : Regulatory differences between China and the US may affect cross-border businesses
• Macroeconomic Impact
  : Economic downturn may amplify the impact of regulation on advertising revenue

Company	Short-Term Rating	Long-Term Rating	Target Price Range
Meta (META)	Hold	Buy	$718-$1,117
Tencent (0700.HK)	Buy	Buy	HK$508-HK$814

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[1] People’s Daily Online - Some Countries Explore Tightening Social Media Use by Minors (International Perspective) (http://world.people.com.cn/n1/2026/0113/c1002-40643914.html)
[2] People’s Daily - Some Countries Explore Tightening Social Media Use by Minors (International Perspective) (http://paper.people.com.cn/rmrb/pc/content/202601/13/content_30131859.html)
[3] Reuters - Australia social media ban hits 4.7 million teen accounts in first month (https://www.reuters.com/world/asia-pacific/australia-social-media-ban-hits-47-million-teen-accounts-first-month-2026-01-15/)
[4] Deep Research Global - Meta Company Analysis and Outlook Report (https://www.deepresearchglobal.com/p/meta-company-analysis-outlook-report)
[5] Beth Kindig - The AI Revenue Leader Nobody Is Talking About (https://beth-kindig.medium.com/the-ai-revenue-leader-nobody-is-talking-about-second-only-to-nvidia-stock-8f0038689f0c)
[6] Investing.com - Meta Trades in Repair Mode as AI Spend and Core Ad Growth Pull Valuation Apart (https://ca.investing.com/analysis/meta-trades-in-repair-mode-as-ai-spend-and-core-ad-growth-pull-valuation-apart-200621073)
[7] Zacks - Top China Tech Plays in US Markets Amid Trade Deal Progress (https://www.zacks.com/stock/news/2806079/top-china-tech-plays-us-markets-amid-trade-deal-progress)
[8] Hello China Tech - Tencent’s AI Strategy Just Did a U-Turn (https://hellochinatech.com/p/tencent-ai-infrastructure-turn)