Australia on Wednesday became the first country to formally bar users under the age of 16 from accessing major social media platforms, a move expected to be closely monitored by global tech companies and policymakers around the world.

Canberra’s ban, which came into effect from midnight local time, targets 10 major services, including Alphabet‘s YouTube, Meta’s Instagram, ByteDance’s TikTok, Reddit, Snapchat and Elon Musk’s X.

The controversial rule requires these platforms to take “reasonable steps” to prevent underage access, using age–verification methods such as inference from online activity, facial estimation via selfies, uploaded IDs, or linked bank details.

All targeted platforms had agreed to comply with the policy to some extent. Elon Musk’s X had been one of the last holdouts, but signaled on Wednesday that it would comply. 

The policy means millions of Australian children are expected to have lost access to their social accounts. 

However, the impact of the policy could be even wider, as it will set a benchmark for other governments considering teen social media bans, including Denmark, Norway, France, Spain, Malaysia and New Zealand. 

Ahead of the legislation’s passage last year, a YouGov survey found that 77% of Australians backed the under-16 social media ban. Still, the rollout has faced some resistance since becoming law.

Supporters of the bill have argued it safeguards children from social media-linked harms, including cyberbullying, mental health issues, and exposure to predators and pornography. 

Among those welcoming the official ban on Wednesday was Jonathan Haidt, social psychologist and author of The Anxious Generation, a 2024 best-selling book that linked a growing mental health crisis to smartphone and social media usage, especially for the young.

In a post on social media platform X, Haidt commended policymakers in Australia for “freeing kids under 16 from the social media trap.”

“There will surely be difficulties in the early months, but the world is rooting for your success, and many other nations will follow,” he added. 

On the other hand, opponents contend that the ban infringes on freedoms of expression and access to information, raises privacy concerns through invasive age verification, and represents excessive government intervention that undermines parental responsibility.

Those critics include groups like Amnesty Tech, which said in a statement Tuesday that the ban was an ineffective fix that ignored the rights and realities of younger generations.

“The most effective way to protect children and young people online is by protecting all social media users through better regulation, stronger data protection laws and better platform design,” said Amnesty Tech Programme Director Damini Satija.

Meanwhile, David Inserra, a fellow for free expression and technology at the Cato Institute, warned in a blog post that children would evade the new policy by shifting to new platforms, private apps like Telegram, or VPNs, driving them to “more isolated communities and platforms with fewer protections” where monitoring is harder.

Tech companies like Google have also warned that the policy could be extremely difficult to enforce, while government-commissioned reports have pointed to inaccuracies in age–verification technology, such as selfie-based age–guessing software. 

Indeed, on Wednesday, local reports in Australia indicated that many children had already bypassed the ban, with age-assurance tools misclassifying users, and workarounds such as VPNs proving effective.

However, Australian Prime Minister Anthony Albanese had attempted to preempt these issues, acknowledging in an opinion piece on Sunday that the system would not work flawlessly from the start, likening it to liquor laws.

“The fact that teenagers occasionally find a way to have a drink doesn’t diminish the value of having a clear national standard,” he added.

Experts told CNBC that the rollout is expected to continue to face challenges and that regulators would need to take a trial-and-error approach. 

“There’s a fair amount of teething problems around it. Many young people have been posting on TikTok that they successfully evaded the age limitations and that’s to be expected,” said Terry Flew, a professor of digital communication and culture at the University of Sydney. 

“You were never going to get 100% disappearance of every person under the age of 16 from every one of the designated platforms on day one,” he added.

On Wednesday stateside, the U.S. Federal Reserve is widely expected to lower its benchmark interest rates by a quarter percentage point to a range of 3.5%-3.75%.

However, given that traders are all but certain that the cut will happen — an 87.6% chance, to be exact, according to the CME FedWatch tool — the news is likely already priced into stocks by the market.

That means any whiff of restraint could weigh on equities. In fact, the talk in the markets is that the Fed might deliver a “hawkish cut”: lower rates while suggesting it could be a while before it cuts again.

The “dot plot,” or a projection of where Fed officials think interest rates will end up over the next few years, will be the clearest signal of any hawkishness. Investors will also parse Chair Jerome Powell’s press conference and central bankers’ estimates for U.S. economic growth and inflation to gauge the Fed’s future rate path.

In other words, the Fed could rein in market sentiment even if it cuts rates. Perhaps end-of-year festivities might be muted this year.

U.S.-China AI talent race heats up

When it comes to brain power, “America’s edge is deteriorating dangerously,” Chris Miller, author of the book “Chip War: The Fight for the World’s Most Critical Technology,” told a U.S. Senate Foreign Relations subcommittee last week. It’s a lead that’s “fragile and much smaller” than its advantage in AI chips, he said.

Part of the difference comes from the sheer scale, especially as education levels rise in China. Its population is four times that of the U.S., and the same goes for the volume of science, technology, engineering and mathematics graduates. In 2020, China produced 3.57 million STEM graduates, the most of any country, and far outpacing the 820,000 in the U.S.

— Evelyn Cheng

The CEO of South Korean online retail giant Coupang Corp. resigned Wednesday, three weeks after the company became aware of a massive data breach that affected nearly 34 million customers.

Coupang said CEO Park Dae-jun resigned due to the data breach incident — which was revealed on Nov. 18 — according to a Google translation of the statement in Korean.

“I am deeply sorry for disappointing the public with the recent personal information incident,” Park said, adding, “I feel a deep sense of responsibility for the outbreak and the subsequent recovery process, and I have decided to step down from all positions.”

Following his resignation, parent company Coupang Inc. appointed Harold Rogers, the Chief Administrative Officer and General Counsel, as interim CEO.

Coupang said that Rogers plans to “focus on alleviating customer anxiety caused by the personal information leak” and to stabilize the organisation.

Park, who joined the company in 2012, became Coupang’s sole CEO in May, after the company transitioned away from a dual-CEO system.

According to Coupang, he was responsible for the company’s innovative new business and regional infrastructure development, and led projects to expand sales channels for small and medium enterprises, among others.

South Korean companies are known for being “very, very cost-efficient,” which may have led to neglecting areas like cybersecurity, Peter Kim, managing director at KB Securities, told CNBC’s “Squawk Box Asia” Wednesday.

“I think the core issue here is that we’ve had a number of other breaches, not just Coupang, but previously, telecom companies in Korea,” Kim added. “I understand some data companies consider Korea to be [the] top three or four most breached on a data, on an IT security basis in the world.”

South Korean companies have been hit by cybersecurity breaches before, including an April incident at mobile carrier SK Telecom that affected 23.24 million people. The country previously saw one of its largest cybersecurity incidents in 2011, when attackers stole over 35 million user details from internet platforms Nate and Cyworld.

Nate is one of the most popular search engines in South Korea, while Cyworld was one of the country’s largest social networking sites in the early 2000s.

Prime Minister Kim Min-seok reportedly said Wednesday that strict action would be taken against the company if violations of the law were found, according to South Korean media outlet Yonhap.

Police also raided the Coupang headquarters for a second day on Wednesday, continuing their investigation into the data breach.

Yonhap also reported, citing sources, that the police search warrant “specifies a Chinese national who formerly worked for Coupang as a suspect on charges of breaching the information and communications network and leaking confidential data.”

Last week, South Korean President Lee Jae Myung called for increased penalties on data breaches, saying that the Coupang data breach had served as a wake-up call.

— CNBC’s Chery Kang contributed to this report.