**Snap Inc. (NYSE:SNAP) shares dropped 10.69% to $4.01 on Thursday following the European Commission’s announcement of a formal investigation into the company’s child safety practices related to the Digital Services Act. This investigation primarily focuses on age restrictions, protections against grooming, and illegal content safeguards on Snapchat. Trading volume surged to 104.1 million shares, approximately 120% above its three-month average of 47.4 million shares.**
**The probe introduces potential regulatory penalties that could negatively affect Snap’s margins, escalating scrutiny for social media platforms globally. This comes on the heels of a U.S. court ruling that found Meta negligent in handling social media addiction issues, leading to speculation about further lawsuits impacting the industry. Since Snap’s IPO in 2017, its stock has plummeted by 83%.**
