As state legislators across the U.S. push for regulations on smartphone use among teenagers, Apple (AAPL) is preparing for a showdown with app developers and lawmakers over child safety. The core debate is whether teenagers’ use of social-media should be regulated solely by the apps themselves or if smartphone makers and app stores also bear responsibility.
Why the Need for Regulating Smartphone Usage?
There are rising concerns over the usage of social media and its impact on teen mental health. Furthermore, this concern has been compounded by instances of these platforms being used to sell drugs to minors and exploit children.
As a result, a rising number of states in the U.S. have proposed a legislation to regulate these platforms. These laws aim to limit data collection on minors, restrict algorithmic content targeting, and require parental consent for account creation.
The Core Debate at the Center of This Legislation
A core point of debate when it comes to this proposed legislation has been between social media platforms and tech majors like Apple and Google (GOOGL). Social media platforms and child-safety advocates argue that enforcing such restrictions will require age verification from Apple and Google, which control the operating systems for the majority of the world’s smartphones.
Apple, however, contends that social-media companies are best suited to verify users’ ages and insists that sharing users’ age data with third-party apps would violate privacy expectations.
Legislation Governing Social Media Usage in Lousiana
This debate was brought to the fore in the state of Lousiana when State Representative Carver, initially focused on holding social media platforms like Meta (META) accountable, saw the logic in a single device-level verification point. As a result, the state representative added the provision of holding tech giants like AAPL accountable before the bill went to a vote.
However, this key provision was later removed from the bill before the bill was passed. Now, as other U.S. states get ready to propose such legislation in their states, this debate may be ignited again.
Is Apple a Buy, Sell, or Hold?
Analysts remain cautiously optimistic about AAPL stock, with a Moderate Buy consensus rating based on 24 Buys, nine Holds, and one Sell. Over the past year, AAPL has increased by more than 20%, and the average AAPL price target of $249 implies an upside potential of 8.7% from current levels.
