Roblox Corporation (NYSE:RBLX) faced fresh scrutiny in Europe after a Dutch watchdog opened a probe into how the platform protects minors.
The development comes as the stock traded lower and an analyst trimmed a price target while keeping a bullish rating.
Wedbush analyst Alicia Reese maintains an Outperform rating on the stock, lowering the price forecast from $165 to $110.
The gaming platform drew scrutiny Friday as the Netherlands Authority for Consumers and Markets launched an official review of its protections for minors.
The Dutch regulator, known as the Authority for Consumers and Markets (ACM), said it will examine whether Roblox takes adequate steps to keep young users safe across the European Union.
The agency said it will assess the platform under the EU's Digital Services Act, which requires strong safeguards for minors.
To address overall safety concerns, Roblox said in January it would require all users to complete a private age check to access chat.
The change adds age-based chat limits, keeps chat off by default for users under age nine without parental consent, and uses camera-based age estimation via Persona with optional ID verification.
Concerns Cited
ACM said children on the platform may face harmful content and unsafe interactions.
The regulator said it has received reports suggesting Roblox's current measures may fall short of EU rules.
Roblox is a major online game platform where users can play and create experiences. It draws tens of millions of daily users worldwide, many of them children and teens.
Critics have raised concerns about minors encountering violent or explicit content.
Under the Digital Services Act, online platforms must take appropriate and proportionate steps to protect children's privacy, safety and security. Enforcement can include binding orders, fines, or periodic penalty payments if a platform fails to comply.
Investigation Timeline
ACM said it reviewed information gathered during a preliminary phase and decided to open a formal investigation. The regulator expects the process could take about 12 months, depending on how it unfolds.
RBLX Price Action: Roblox shares were down 10.58% at $67.71 at the time of publication on Friday, according to Benzinga Pro data.
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