Digital Gate Keeping

Why Age Verification Matters

Since inception, the internet has been marked by minimal regulation, unpredictability, and a sense of boundless opportunity. Pundits also questioned it's longevity and impact. Clifford Stoll famously declared that the internet was an “unedited wasteland” that would not replace newspapers, teachers, or commerce (even mentioning that e-commerce was “baloney”). Paul Krugman’s 1988 prediction was that the internet would have “no greater impact on the economy than the fax machine.” This skepticism only grew with the dot-com bubble.

With hindsight, we can see that the internet has profoundly transformed how people access information and connect with one another. This comes from positive and negative experiences but one thing is certain: the internet is here to stay.

With the internet’s meteoric growth (5.35bn people used the internet in 2024, 66.2% of the global population), the focus has now shifted from how many people are on the internet to who is using it and for what?

The internet has evolved from the Wild West of the 1990s into an essential part of daily life, where social media, streaming, e‑commerce, gaming, banking, logistics, and communication all converge. But with its growth comes new risks, especially for children and teens who can encounter adult content, predatory behavior, and high‑risk features like online gambling with just a few clicks.

In response, governments worldwide are moving beyond the honor‑system checkboxes of the past (“Are you 18+?”) toward strict, enforceable age verification rules. These changes affect every corner of the digital world, from video platforms and marketplaces to chat apps and immersive virtual worlds, forcing platforms to balance safety, privacy, and ease of access in an increasingly regulated online environment.

Key Changes Across the Online World

Just looking at some examples in the United States gives insight into how important a topic this is:

• Texas HB 1181 (2023): Requires 18+ verification with government ID or commercial tools for explicit content sites, plus health warnings, with heavy penalties for non‑compliance.
• Utah SB 142, App Store Accountability Act (2025): Makes app stores, not just developers, verify user ages and get parental consent before minors can download apps or make in‑app purchases.
• Louisiana HB 570 (2025): Requires platforms/app stores to collect users’ age category and obtain verifiable parental consent for minors.
• Louisiana HB 577 (2025): Shifts age verification and parental consent responsibility for app downloads from developers to app stores.
• Georgia SB 351 / Act 463 (2024): Mandates parental consent for social media accounts for users under 16 and requires robust age verification.
• Other state adult‑site verification laws (AL, AR, AZ, FL, ID, KY, MO, MT, NE, NC, ND, OK, SC, SD, VA, WY): Require government‑approved methods to confirm users are 18+ before accessing explicit content, often with fines and platform blocking for violations.

To help visualize the breadth of this regulation, below is a sample regulatory database map from one of our portfolio companies, k-ID (which covers 195+ countries and 22k regulatory sources). Tools like k-ID help companies understand the granularity of these laws and ensure compliance across geographies.

Other important country-wide governance:

• United Kingdom: The Online Safety Act (effective July 2025) mandates “highly effective” verification for adult content and high‑risk online features.
• European Union: The Digital Services Act requires proportionate, privacy‑conscious age verification for major platforms. Trials of a privacy‑preserving EU‑wide digital identity tool are already underway.
• Australia & Brazil: Both are introducing new rules targeting online services that offer gambling, loot boxes, or high‑risk interactions, with specific provisions to limit minors’ access.

Impacts: Business Models, Consumer Behavior

Business Models

‍Stricter age verification laws are driving up compliance costs for online platforms, especially those in gaming, streaming, and social media. Businesses now need to invest in verification technologies such as AI, biometrics, and KYC systems, and hire legal and privacy experts to keep pace with shifting regulations.

App stores and large platforms are being made directly responsible for verification, changing the economics of distribution, and encouraging partnerships with verification tech vendors. While these measures improve safety, they can add friction to user onboarding and risk lowering conversion rates, forcing companies to redesign sign‑up flows and reconsider monetization strategies.

Models dependent on under-18 or unverified audiences, like certain free-to-play games or gambling services, will potentially be under pressure to pivot toward parental-consent-driven or family-friendly subscription models.

Consumer Behavior

‍Consumers, especially parents, are becoming more aware of age-gating and are increasingly scrutinizing how platforms handle identity and privacy. People are more cautious about sharing sensitive documents or biometrics, demanding strong assurances and transparency.

Some users avoid platforms with overly cumbersome verification, preferring services that balance compliance with convenience. 62% of cart abandonment has been linked to inefficient or cumbersome age verification steps (Facia).

Verified adult users may gravitate toward platforms with seamless age checks, while younger users and families are adopting supervised accounts and parental consent workflows as a regular part of online engagement. Overall, privacy concerns, trust in platforms, and perceived user‑friendliness are becoming critical factors in how consumers choose where to spend their time and money.

‍Solutions

Most platforms today, under legislative pressure, often choose to block or ban specific users because it is often easier than finding solutions that may be a hassle to integrate or cost more. However, given how deeply the web and broader internet are woven into daily life, excluding individuals simply encourages them to seek alternative methods to circumvent restrictions. This approach does little to address the fundamental goal of new regulations: protecting vulnerable populations.

Most regulators are encouraging companies to leverage third-party tools to help stay compliant. These solutions include parental consent, age verification, age estimation, family controls, and integrated solutions to update apps and websites in accordance with current regulations. Third-party providers help companies stay compliant without developing and managing their own solutions. SSO-focused solutions could even reduce onboarding friction by allowing users to access multiple platforms and products with one entry point.

We believe the ideal solution is an anonymous digital identity platform that acts as a passkey to log into platforms with updated and verifiable information that identifies users. This could also be leveraged as a family account where parents can onboard their kids and allow them to seamlessly log in with parental oversight and guidelines.

‍Takeaway: Online age verification has become a major priority as the internet has shifted from a lawless Wild West into an essential part of daily life; now it is being regulated to protect vulnerable users from adult content, predatory behaviors, and high-risk features like online gambling. Governments worldwide are moving from simple honor-system age gates to rigorous, enforceable rules. These regulations require platforms and app stores to adopt robust verification measures and parental consent workflows. As a result, business models are changing, compliance costs are rising, and companies are being compelled to redesign user experiences while balancing safety, privacy, and convenience for consumers. As stricter laws reshape the digital landscape, innovative solutions like anonymous digital identities and centralized family accounts promise to increase protection without sacrificing usability and anonymity, but also raise new questions about privacy, trust, and equitable access for all users.