Roblox Corporation's stock fell 5% during intraday trading on Thursday, as the company faces increased regulatory scrutiny from UK watchdogs over child safety protections.
Britain's media regulator Ofcom and privacy watchdog ICO have demanded that Roblox and other major social media platforms demonstrate stricter age verification measures and enhanced protections for children by April 30. The regulators warned that companies could face significant fines - up to 10% of global revenue from Ofcom and 4% of global turnover from ICO - if they fail to comply with the Online Safety Act requirements.
A Roblox spokesperson acknowledged the regulatory pressure, stating that the company has launched more than 140 new safety features in the past year, including mandatory age checks for chat functions. However, investors appear concerned about the potential compliance costs and operational changes required to meet the new regulatory standards.
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