Bluesky’s recent decision to cease operations in Mississippi rather than comply with a new state social media law highlights the significant challenges that age verification requirements impose on smaller tech companies. In a blog post, Bluesky expressed, “Unlike tech giants with vast resources, we’re a small team focused on building decentralized social technology that puts users in control.” The company emphasized that age verification systems involve substantial infrastructure costs and developer time, as well as complex privacy protections and ongoing compliance monitoring—burdens that can easily overwhelm smaller entities.
Impact of the Mississippi Law
The Mississippi law, which mandates that social media platforms obtain parental permission for users under 18, poses broad implications for a variety of companies beyond traditional social media. Without clear guidance, it threatens to pull in numerous platforms into costly compliance frameworks. This uncertainty extends to the types of age verification technologies that businesses can use to avoid enforcement penalties.
In light of the law, other companies have taken similar actions to Bluesky. For instance, online journal Dreamwidth announced it would block access from all Mississippi IP addresses starting September 1, while Nextdoor has prohibited users under 18 from creating accounts as of August 15. Sophia Contreras Schwartz, chief legal officer at Nextdoor Holdings Inc., lamented the burdensome nature of the Mississippi law: “It imposes requirements that create unnecessary barriers for legitimate users of all ages to access our service—a service grounded in building stronger local communities.” Both Bluesky and Nextdoor are members of the tech lobby NetChoice, which is challenging the law in court.
Legislative Context and Compliance Challenges
This law (HB 1126) arose in response to a tragic incident involving a minor and necessitates rigorous age verification to avoid fines of up to $10,000 per user. The Supreme Court recently denied a request from NetChoice to block the law during ongoing legal challenges, leaving smaller companies in a precarious position as they navigate potentially unconstitutional regulations.
Megan Stokes, state policy director for the Computer & Communications Industry Association, highlighted that the law’s broad definitions could ensnare companies that do not primarily identify as social media platforms. Compliance would escalate costs as companies may need to establish new privacy measures and content moderation systems, along with the adoption of third-party age verification services. Engine, a nonprofit focused on startup growth, estimated that implementing age verification technology could cost small businesses at least $500,000.
Technological Implementation and Privacy Concerns
Even when small and medium-sized businesses opt for third-party providers rather than developing their own solutions, this adds another layer of compliance complexity. Many age verification services require sensitive data, such as biometrics, necessitating stringent adherence to state laws governing such information. Furthermore, states have yet to clarify which vendors fulfill the age verification requirements, leading to additional uncertainty for companies tasked with determining what counts as a “commercially reasonable” effort.
As the tech industry seeks solutions, companies like Google and Roblox are rolling out age-assurance technologies. Yet, Bluesky asserts that Mississippi’s law exceeds other regulations, requiring all users to undergo identity checks to access basic services. This mirrors responses from the adult entertainment industry, which has also limited access in states enforcing strict age verification rules.
Future Implications for the Industry
For smaller tech companies, the risk of investing in compliance processes that could later be invalidated becomes a major concern. “If you’re a small or medium company it might be risky to build out a new process just for the Supreme Court to ultimately say this law is unconstitutional,” said Bailey Sanchez, deputy director of the Future of Privacy Forum’s US Legislation Team. As more states adopt similar laws, the burden of compliance may compel even more companies to reconsider their operational strategies in states like Mississippi.
