Regulation of the technology sector often comes under the guise of a moral imperative, but its real consequences are almost always economic. A quiet revolution is underway in the way we approach the internet. What began as an attempt to protect the youngest is transforming into the construction of the most valuable infrastructure of the 21st century, a universal layer of digital identity.
While laws on ‘age verification’ are sold to the public as a necessary tool for protecting children, behind the scenes, a new digital economy and a new distribution of power are taking shape. The question is no longer whether to regulate access to content, but who will control the infrastructure, bear the costs, and, crucially for the business world, profit from it. A new market vertical is emerging in the background, Compliance as a Service (CaaS), where compliance with regulations ceases to be an administrative burden and becomes a profitable product.
Identity in the Device
Currently, in the United States, a legislative pattern is emerging that repeats from California to New York. Instead of the responsibility remaining with the platforms that distribute content, new regulations shift it to the level of operating systems and app stores.
In practice, this means that Apple, Google, and all other operating system providers would have to collect data on users’ ages at the time of device activation, and convert it into a standardized signal available to applications in real-time. For Big Tech, this is not just an obligation but an opportunity for deeper ‘lock-in’ of users into their own ecosystems.
Such a model creates something that has not existed before, a permanent layer of identity embedded in the device itself. This is not just a technical change but also a massive market opportunity. Companies specializing in digital identification, such as Yoti, Veriff, and Jumio, are already charging for each individual verification, and the legislative framework that makes them necessary turns their service into mandatory infrastructure. Thus, regulation directly creates a new, highly profitable verification market, where every entry of a minor (or adult) onto a platform becomes a micro-transaction for the service provider.
Winner Zuckerberg
At the same time, the biggest strategic winner could be Meta Platforms. The company that has been under pressure for years due to the impact of its platforms on minors now supports a model that shifts the regulatory burden onto other parts of the ecosystem, primarily Apple’s iOS and Google’s Android. While actively lobbying on laws that would limit its business, in the case of regulations that burden operating systems, it takes a significantly more restrained, almost observational stance.
This is a brilliant strategic maneuver because if Apple takes over verification, Meta sheds legal risk and cost while retaining a ‘cleaned’ and verified user base for its advertisers. Through funding initiatives and advocacy groups, Meta participates in shaping the legislative framework that increases costs for smaller competitors while leaving it maximum maneuvering space.
However, the financial logic is only part of the story. Alongside technology companies, ideological organizations play a strong role, seeing these laws as a tool for broader content control. The debate in Minnesota around the proposed law HF1434 clearly illustrates this. Representative Leigh Finke warned that broadly defined terms like ‘harmful content for minors’ could encompass completely legal information about sexual health, gender identity, or reproductive rights. Once established, this infrastructure can easily be repurposed from child protection to a tool for broader censorship.
